As Suwon City pursues economic stimulus measures through early fiscal expenditure, major tax revenue sources are concentrated in the second half of the year, creating challenges in securing funds. This has raised concerns that the impact of early budget execution on citizens' economy may be limited.
According to the city, Suwon City, which is pursuing early fiscal execution, achieved results by prioritizing 31.7% (390 cases) of 1,230 key-managed projects—including construction and service contracts of 10 million won or more and goods purchases of 2 million won or more—for early issuance last month.
The budget execution rate also increased to 5.901%, more than double the 2.865% from January of last year. Currently, the city has secured 12% (approximately 25.9 billion won) of approximately 215.2 billion won in government subsidies from national treasury supplements and local transfer taxes. This exceeds the 10% target set by the city for securing subsidies.
As early fiscal execution is proceeding smoothly thus far, the city plans to issue construction projects accounting for 90% of key-managed projects and allocate 60% or more of funds in the first half of the year. In particular, the Construction and Transportation Department, which concentrates budgets on large-scale projects and design, is accelerating pre-administrative procedures for project issuance and various permits and coordination with related departments.
However, while design service issuance, utility relocation, and civil engineering projects can be issued early, concrete work closely tied to temperature conditions is practically difficult to issue early within the first quarter. Notably, even if design services are pursued, obtaining results requires a long period, and actual project issuance and budget execution are inevitably delayed.
Even if project issuance is expedited, tax revenue collection becomes a bottleneck. Local taxes such as automobile tax and property tax—which constitute most of the city's financial revenue—and non-tax revenue are concentrated in the second half of the year, creating an emergency in securing early execution funds.
The city has organized an emergency countermeasure team to strengthen collection activities for local taxes and non-tax revenue. However, the city is expected to face considerable financial pressure until the second half of the year, when actual tax revenue is anticipated to materialize.
More problematic is the growing concern that if revenue shortage from first-half early execution combines with sluggish economic recovery that continues into the second half, the city could face the worst financial crisis.
Experts advise that the city should pursue early fiscal execution with an eye toward fiscal soundness, as additional fiscal execution may be required, which could create a vicious cycle of resource shortages.
A city official said, "If we boldly reduce projects with slow progress and those not needed at this time during supplementary budget formulation, and focus all efforts on securing tax revenue, we will sufficiently reach our early execution targets."
The official added, "However, even with such early execution, if the economic crisis continues through the second half of the year, citizens' perceived economic conditions could worsen further, so we are also reviewing additional countermeasures."
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