The government is reportedly pushing a plan to change how the grant-in-aid (earmarked tax) for educational finance is allocated, shifting from the current "automatic payment of 20.79% of national tax" to "guaranteeing no less than the previous year's grant-in-aid." Even as the number of school-age children declines, a fixed share of national tax aggregates has been automatically assigned to the local education grant-in-aid, drawing criticism that superintendents have used it as a slush fund for "giveaways."
Currently, under relevant law, 20.79% of national tax is automatically allocated to the local education grant-in-aid. The amount set for this year is 76 trillion won. But that figure is expected to rise further. Some project that excess semiconductor tax revenue could reach 100 trillion won this year; if that happens, an additional grant-in-aid in the 21 trillion won range would flow down to provincial and metropolitan education offices.
Accordingly, the Ministry of Planning and Budget has reportedly concluded that the automatic allocation method for the local education grant-in-aid needs to be changed. The education sector opposes the move. Minister Choi Kyo-jin of the Ministry of Education said on the 28th, "It is fundamentally hard to agree that education budgets should be cut just because the number of students is decreasing."
With the situation unfolding this way, the Ministry of Planning and Budget is said to have prepared a plan to ease opposition in the education sector. The idea is to scrap the method of automatically allocating a fixed share of national tax and instead introduce the principle that "the grant-in-aid aggregates will not be lower than the previous year." In years like this one, when excess tax revenue surges, this would prevent the local education grant-in-aid from swelling by tens of trillions of won, while still keeping the total grant-in-aid at or above the prior year's level.
If the plan prepared by the Ministry of Planning and Budget is applied, the size of the grant-in-aid could decrease over time compared with the current method. A companion idea under review would allow the portion corresponding to the difference to be used for a set period in other education areas such as higher education, lifelong education, and early childhood education. That could support regional universities suffering from chronic funding shortfalls and benefit the overall educational environment in those regions.
Recently, the Ministry of Planning and Budget proposed this plan to the Ministry of Education and reportedly began follow-up discussions.