Gyeonggi Province in "Effective Default Status," Already Forewarned Last Year

The financial crisis of Gyeonggi Province that Governor Choo Mi-ae stated "I was only informed of after taking office" had already surfaced last year during the 2026 budget compilation process in the form of controversy over "welfare budget cuts." At that time, as Gyeonggi Province failed to fully reflect some project expenses in the main budget citing insufficient funds, political backlash ensued.

According to the Gyeonggi Provincial Assembly and other sources on the 10th, Gyeonggi Province attempted large-scale cuts focused on the social welfare and women's sectors while compiling the 2026 main budget last year. The size of the cuts reached approximately 446.5 billion won across 326 projects.

Governor Choo declared a financial emergency on the 5th, citing the 8th term's "nine-month budget" as key evidence, stating "I was only informed after taking office of this grave fact and the specific financial reality."

However, this issue had already been directly addressed in the provincial assembly eight months prior. The cuts included long-term care facility benefits for the elderly, infant meal expenses at daycare centers, Nuri curriculum operational support, youth basic income, and youth worker support programs—some of which were not reflected in the budget proposal.

The political sector protested. Congressman Kang Deuk-gu (Democratic Party, Anyang Manaan) demanded the restoration of the province's cut welfare budget. The People Power Party at the Gyeonggi Provincial Assembly also demanded restoration of the reduced livelihood budget, with former PPP representative Baek Hyun-jong entering an indefinite hunger strike and shaving his head in protest.

Gyeonggi Province also attributed the budget cuts to insufficient funds at the time. Deputy Governor Koh Young-in explained that with an increase in national treasury projects, the additional provincial funds Gyeonggi Province would need to bear amounted to 304.9 billion won, making adjustments to self-funded projects inevitable. He noted that the local government's financial burden in responding to national government projects—including infant childcare expenses, childcare staff salaries, parental benefits, child allowances, and basic living expenses—had increased.

According to the 8th term administration, some of the projects known as "cuts" at the time were not actual project reductions but rather partial allocation of annual requirements to the main budget while presupposing supplementary budgets.

They stated, "We didn't deliberately cut; as we made supplementary budgets two or three times, we allocated for about six to nine months and planned to increase the remainder during supplementary budget rounds." Regarding the inability to cover the full annual needs, they explained, "We should have allocated a full year's worth, but due to insufficient revenue, we could not allocate a full year."

In fact, Gyeonggi Province responded by additionally allocating some project expenses that were insufficiently reflected in the main budget during budget deliberations and supplementary budget processes. Deputy Governor Koh Young-in also announced a policy to supplement essential welfare budgets during budget deliberations and supplementary budget processes in consultation with welfare organizations and the provincial assembly.

Issues surrounding fiscal management were confirmed to have appeared in the provincial assembly's minutes at the time. Provincial Assemblyman Kim Han-seul (People Power Party, proportional representation) stated, "After reviewing the meeting minutes and materials from last year, I confirmed that all the points were recorded in last year's plan meeting minutes—such as the problem of borrowing new funds to repay existing debt or when funds lend money here and there from the fund, reducing the available amount actually usable."