Suwon Mayor Yom Tae-young: "We will prevent fiscal crisis from happening again"

[Suwon Ilbo=Reporter Seo Dong-young] Suwon City is tightening its belt to overcome next year's fiscal crisis.

Suwon Mayor Yom Tae-young announced at the second regular session of the 347th Suwon City Council on the 20th that the theme for Suwon City in 2020 is 'refresh.' This reflects his commitment to renewing the conventional ways of implementing projects.

In particular, the budget facing a crisis due to declining local tax revenue and expanded welfare spending is the top priority among areas that need renewal.

The city, one of the nation's largest local government entities, compiled a budget of 2.8099 trillion won with 'refresh' in mind.

The general account budget was compiled at 2.3686 trillion won, an increase of 89.1 billion won compared to the previous year's original budget.

The city explained that despite the expanded budget, financial conditions have not improved. Local tax revenue, which comprises the largest portion of income, stands at 890.7 billion won, down 71.5 billion won from the previous year's original budget. This is 172.3 billion won less than the first supplementary budget of 1.063 trillion won.

The decline in self-generated revenue was anticipated. The semiconductor industry, which forms the foundation of Suwon's economy, has weakened. The real estate market is also unpredictable.

The city made an all-out effort in securing additional financial resources. Following efforts to transition to a transfer city, it received 42.9 billion won in regular government grants, filling gaps in its coffers. Relinquishing the non-transfer city status maintained for 25 years since the introduction of local autonomy in 1995 was not easy, but citizen welfare came first.

Consequently, dependent revenue received from the central government, including regular government grants, increased significantly to 1.0732 trillion won. Among these, national and provincial subsidies increased by 86.2 billion won to 830.1 billion won.

The city noted that this represents an increase in 'tagged revenue' with predetermined uses. Furthermore, the increase in national and provincial subsidies means that the scale of city budget expenditures matched to them must inevitably expand as well. This means the city's available resources for implementing its own projects have been reduced.

To secure insufficient revenue sources, the city issued 84.5 billion won in municipal bonds and abolished 15.8 billion won in the public development special account, transferring it to the general account. The city is pursuing expenditure restructuring in a direction that maintains citizen welfare while improving the fiscal structure. All projects were reviewed meticulously to minimize budget waste. Rather than launching new projects, emphasis was placed on completing existing ones.

Welfare spending could not be reduced. The largest portion of the city's general account expenditure budget is the social welfare sector. This amounts to 1.0418 trillion won, representing 44% of next year's total budget, an increase of 77.3 billion won from the previous year.

Additionally, 176.3 billion won, an increase of 23 billion won, will be invested in transportation and logistics, and 158.8 billion won, an increase of 17.6 billion won, in culture and tourism.

In accordance with Mayor Yom's policy that "fiscal crisis should not lead to a decrease in citizen welfare," the measures for fiscal efficiency were faithfully reflected.

In contrast, the general public administration sector saw spending significantly cut. At 122.9 billion won, the city saved 29.7 billion won, representing 19.5% of this year's original budget. Event-related expenses were reduced by 4 billion won, and through performance evaluation and fiscal project evaluation, local subsidized projects were reduced by more than 20%. The operating and project costs of over 80 various private outsourcing projects were adjusted, resulting in a reduction of 8.9 billion won.

In addition, as a matter of shared sacrifice, administrative operating costs such as civil servants' overtime allowances, office management expenses, travel expenses, and operational promotion funds were reduced, and welfare budget allocations were also economized.

The city established the basic directions for fiscal management as a prosperous city, a safe city, a happy city, and a city of tradition and culture. Attention was also given to budget allocation for major projects including park acquisition costs (45.8 billion won) due to park expropriation, underground conversion of the Suwon section of the second phase of the Su-In Line (11.5 billion won), expansion of soundproof walls on Suwon's outer ring road (20 billion won), facility improvements at Yeonhwa Crematorium (11.3 billion won), and construction of the new Paldalpo Police Station (20 billion won).

The fiscal crisis facing the city stems from external factors such as prolonged domestic and international economic downturns and international trade conflicts, making improvement difficult. Rather than succumbing to despair, the city has prepared various improvement measures for efficient fiscal management, designating 2020 as the 'first year of fiscal soundness.'

First, to minimize the impact of the fiscal crisis, a 'fiscal stabilization fund' will be established and operated starting January 1 next year. The fiscal stabilization fund is a resource that is accumulated at 10% or more of net account surplus and 10% or more of the increase in regular general revenue of the previous year, enabling use in case of a fiscal crisis.

Additionally, the city plans to comprehensively improve fiscal project evaluation, event and festival project evaluation, and local subsidy evaluation to enhance fiscal transparency and efficiency. Moreover, through research and service studies on rationalization of affiliated organizations' operations, Suwon City plans to establish a more sound fiscal management foundation.

Suwon Mayor Yom Tae-young pledged, "Starting from the first half of next year, we will implement efficiency plans to ensure that a fiscal crisis never occurs again."