Gyeonggi Province Financial Crisis Overcome Strategy TF Begins Discussion on Revenue and Institutional Reform
Following Governor Choo Mi-ae's declaration of a financial emergency in Gyeonggi Province, the ‘Financial Crisis Overcome Strategy Task Force (TF)’ installed in the province has begun full-scale operations.
The task force plans to establish a comprehensive financial normalization strategy for the province by the end of August, ranging from short-term expenditure restructuring to mid-to-long-term revenue and institutional reform.
On the 10th, Gyeonggi Province held the first meeting of the Financial Crisis Overcome Strategy TF chaired by Vice Governor for Economy Ju Hyung-chul at the Gyeonggi Province Government Office to discuss these countermeasures.
Vice Governor Ju Hyung-chul stated, “The governor declared a ‘financial emergency situation in Gyeonggi Province’ on August 5th. This is not just a problem for this year, as conditions will not improve next year either, so if we don't take action now, the crisis will become chronic.” He added, “We need to identify the exact causes to find proper solutions. The most fundamental cause is the outdated local finance system.”
He explained that in the AI era, the forms of industry and the way added value is created have changed, and welfare demands have surged, yet the local finance system remains tailored to the development era.
Vice Governor Ju continued, “The governor has instructed the TF to be immediately mobilized and establish effective countermeasures by the end of this month. Within three weeks, we will create an effective implementation system to protect the lives of provincial residents and the future of Gyeonggi Province.” He presented four key tasks.
The four key tasks are △strong business and financial restructuring △expanding revenue in the AI era △strengthening solidarity and cooperation △voluntary cost reduction by all members.
Looking at the main content by task, first, the province will undertake strong and bold business and financial restructuring. The 2027 budget will be subject to ground-zero review within available resources, and the province will reallocate roles between the central government, municipalities, the private sector, and Gyeonggi Province. Reviews will also be conducted on special accounts, funds, and public institution resources. The province plans to protect livelihood and safety projects through ‘pinpoint adjustment’ without mechanical blanket cuts and maintain public service levels through business innovation.
Second, the province will establish standards suited to the AI era and expand revenue. It will redesign the structure of administrative and fiscal distribution between the state and local governments so that local affairs for future growth can be properly executed, and establish a principle that when state affairs are transferred to local governments, finances follow. Additional discovery of local taxes and non-tax revenues and recalculation of additional revenues that can be secured within the year are also included in implementation tasks.
Third, the province will cooperate with 31 municipalities and other metropolitan local governments facing the same issues to urge the government and National Assembly to reform the outdated finance system. The province plans to communicate with the Gyeonggi Provincial Council and share progress with residents as processes are carried out.
The final task is the voluntary efforts of all public officials. All members of the provincial government and public institutions will focus their capabilities as financial actors to eliminate customary waste factors and ensure budgets are invested timely in livelihood and future investment.
The Financial Crisis Overcome Strategy Task Force is headed by Vice Governor Ju Hyung-chul, with a total of 50 participants including bureau chiefs and an external expert advisory group, operating in four divisions: △expenditure sector △revenue and tax reform △communication and publicity △external cooperation.
The province will hold a second meeting on the 13th to finalize countermeasures by the end of August and will launch a ‘(tentative name) Financial Crisis Overcome Implementation Committee’ in September to continue monitoring implementation.