Seongnam and Hwaseong Cities: "Will Refuse State-Delegated Tasks if Local Finance Restructuring is Forced"

Seongnam and Hwaseong cities are set to refuse state-delegated tasks in response to the central government's legislative notice on local finance restructuring, raising concerns about major fallout.

Seongnam Mayor Lee Jae-myung and Hwaseong Mayor Chae In-seok jointly issued a statement on the 12th, declaring, "If the central government forcibly pushes ahead with the local finance restructuring, we have resolved to refuse state-delegated tasks."

In their statement, the two mayors argued, "Local governments handle 40 percent of national affairs, but local revenue accounts for only 20 percent of the total, leaving us with 'two-tenths autonomy.' Nevertheless, the central government continuously shifts state affairs such as basic pensions and childcare subsidies to local governments, pressuring local finances."

They continued, "In July 2014, the Presidential Committee on Local Autonomy Development acknowledged that the increased burden on local finances had reached 4.7 trillion won and established detailed refund plans including rate increases for local consumption tax and local transfer tax. However, rather than honoring these refund promises, the government pushed ahead with a legislative notice on financial restructuring that levels down local government finances."

The two mayors stated, "Six cities—Seongnam, Hwaseong, Yongin, Goyang, Suwon, and Gwacheon—have 170,000 won more in per capita local tax payments than the remaining 25 cities and counties in Gyeonggi Province, yet receive 100,000 won less in per capita allocated budgets. This is not 'resolving disparities' as the government claims, but rather 'expanding reverse discrimination,' and the government is concealing this and deceiving the public."

Earlier, the Ministry of Public Administration and Security announced a legislative notice on the 4th for amendments to the Local Finance Act enforcement ordinance, eliminating special provisions for priority allocation of ordinary transfer grants to six municipalities without subsidies and increasing the weight of fiscal capacity indices while decreasing the weight of collection performance in the criteria for city and county adjustment transfer grant allocation.