Gyeonggi Province fiscal emergency and budget restructuring

Gyeonggi Province has entered a period of fiscal instability characterized by significant budget shortfalls and demands for central government intervention.

Governor Choo Mi-ae initially highlighted a heavy financial burden regarding national fire officer salaries, noting that the province covers more than 1 trillion won of the total costs. Choo argued that while national personnel costs should be the central government’s responsibility, the current arrangement forces the province to fund the bulk of the burden, threatening its fiscal stability.

Following these concerns, the province declared a fiscal emergency. To address a projected 300 billion won shortfall in local tax revenue driven by a slump in the real estate market, the provincial government submitted a supplementary budget proposal of 42.24 trillion won. This plan includes 546.5 billion won in budget cuts targeting non-essential projects, administrative expenses, and high-ranking official business costs to protect essential services such as elderly care and medical services for the vulnerable.

The announced expenditure restructuring has heavily impacted social overhead capital (SOC) projects in northern Gyeonggi. In Yangju, 19 billion won intended for land compensation for the Bugok-Bugok local highway construction has been entirely cut, leading to inevitable delays. In Pocheon, 13.7 billion won was slashed from various road expansion and river maintenance projects, including the Gunnae-Naechon road expansion and the Hasongwoo-Masan road. Local officials and provincial council members have expressed strong opposition, arguing that the cuts will neglect regional development and resident safety. The proposed second supplementary budget is scheduled for deliberation during the Gyeonggi Provincial Council's extraordinary session starting September 1.