As Gyeonggi Governor Choo Mi-ae declared a "Gyeonggi Province fiscal emergency" on the 5th and has been calling daily for a reform of local government finance, People Power Party leader Jang Dong-hyeok criticized on the 9th on Facebook, saying, "Eight years of Democratic Party governors have bankrupted Gyeonggi."
Jang said, "During Governor Lee Jae-myung's tenure, countless 'free policies' such as basic income for youth, free school uniforms, and postpartum care subsidies were introduced." He added, "When acquisition tax revenue increased due to the real estate price surge in 2020, the welfare budget was increased by as much as 12.8%, which is no different from the current irresponsible fiscal expansion premised only on a semiconductor boom."
He continued, "In 2021, the last year of Governor Lee Jae-myung's term, Gyeonggi Province's liability increased by a staggering 64.5% in just one year," adding, "The fixed welfare expenditure created at that time is still a burden on Gyeonggi's finances."
Jang said, "Gyeonggi's welfare budget accounts for 49% of the total, and if Governor Choo Mi-ae's plan proceeds, the share (of total outlays) will rise to 60%." He also said, "Gyeonggi's fiscal self-reliance is 44%, far exceeding the national average of 32.3%. Most local governments' fiscal environments are far worse than Gyeonggi's, yet no local government is 'crying wolf' like Governor Choo Mi-ae."
Jang said, "No matter how much revenue increases, if you don't cut reckless expenditure, default is inevitable," adding, "To normalize the finances, tightening the belt must come first." He then said, "Eight years of Democratic Party governors have gutted Gyeonggi." He continued, "President Lee Jae-myung still has four years left in his term," adding, "At this rate, whoever becomes the next president will inherit an 'empty-shell Republic of Korea.'"
Meanwhile, on the 5th, Governor Choo declared a Gyeonggi fiscal emergency, saying a 770 billion won cut in a supplementary budget was unavoidable. Since then, she has argued that Gyeonggi's fiscal situation is poor and that the grant-in-aid (non-earmarked tax) system should be reformed. On the same day on Facebook, she said, "When Korea's industry does well, corporate tax increases, and 19.24% of the increased national tax becomes the grant-in-aid (non-earmarked tax) resource, but Gyeonggi does not receive a single won in general grants."
The grant-in-aid (non-earmarked tax) consists of general grants, earmarked tax (special), real estate grants, and fire safety grants. Whether to provide general grants is decided each year by the Ministry of the Interior and Safety, which determines whether a local government can cover administrative expenses with its own revenue. Gyeonggi has been classified as a so-called "surplus local government" that can cover administrative expenses with its own revenue and, along with Seoul, has been excluded from receiving the grant-in-aid (non-earmarked tax).