Suwon Mayor Yeom Tae-young: "We will prevent financial crises from occurring again"

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

At the 2nd regular session of the 347th Suwon City Council held on the 20th, Mayor Yeom Tae-young announced that the keyword for Suwon City in 2020 would be 'refresh.' This reflects the determination to renew project implementation methods that have become entrenched as customs.

In particular, the budget, which faces a crisis due to declining local tax revenue and expanded welfare spending, is the top priority among targets that must be reformed.

The city, which is the largest local government entity in the nation, has compiled a budget of 2.8099 trillion won with 'refresh' in mind.

The general account budget has been 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 the expansion of the budget does not mean the financial situation has improved. Local tax revenue, which comprises the largest portion of revenues, decreased to 890.7 billion won, down 71.5 billion won from the previous year's original budget. This is 172.3 billion won less compared to the first supplementary budget (1.063 trillion won).

The decrease in independent revenue was anticipated. The semiconductor industry, which can be considered the industrial foundation of Suwon, has become unstable. The real estate market is also difficult to predict.

The city made an all-out effort in fiscal expansion sales. After making efforts to convert to a recipient of central government allocation, the city received 42.9 billion won in regular fiscal transfer payments to fill gaps in its treasury. It was not easy to give up the non-recipient status maintained for 25 years since the introduction of civilian autonomy in 1995, but citizen welfare came first.

As a result, dependent revenue received from the central government, including regular fiscal transfer payments, 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 disclosed that this means an increase in 'earmarked revenue' with designated uses. Moreover, the increase in national and provincial subsidies necessarily means that the scale of city funds invested accordingly must also increase. This means that the available resources for the city to operate its own projects and initiatives have shrunk.

To secure insufficient revenue sources, the city issued 84.5 billion won in municipal bonds and abolished the public development special account of 15.8 billion won, transferring it to the general account. The city is pursuing structural adjustment in expenditures in a direction that maintains citizen welfare while improving the financial structure. To minimize budget waste, all projects were examined as if through a microscope. Rather than starting new projects, the focus was on completing existing projects.

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

In the transportation and logistics sector, 176.3 billion won (an increase of 23 billion won) will be invested, and in culture and tourism, 158.8 billion won (an increase of 17.6 billion won) will be invested.

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

On the other hand, the city significantly reduced spending in the general public administration sector. With 122.9 billion won, the city saved 29.7 billion won, which is 19.5% of this year's original budget. Event-related expenses were cut by 4 billion won, and through performance evaluation and fiscal project assessment, local subsidy projects were reduced by more than 20%. The city adjusted the operating costs and project expenses of over 80 various private outsourcing projects, reducing expenditures by 8.9 billion won.

Furthermore, in the spirit of shared sacrifice, the city cut administrative operating costs such as public officials' overtime allowances, office management costs, travel expenses, and business promotion expenses, and also saved on employee welfare budgets.

The basic direction for fiscal management was set as a prosperous city, a safe city, a happy city, and a city of tradition and culture. Attention was also paid to budget allocation for major projects including park site acquisition costs due to the expiration of urban parks (45.8 billion won), underground conversion of the second section of Suin Line in Suwon's area (11.5 billion won), soundproof wall expansion on Suwon's outer ring road (20 billion won), facility improvements at Yeonhwa Hall (11.3 billion won), and new construction of Paldal Police Station (20 billion won).

The fiscal crisis facing the city is due to external factors such as prolonged domestic and international economic downturns and international trade conflicts, making it difficult to improve quickly. Rather than being discouraged by this situation, the city has shown determination to establish 2020 as 'the first year of fiscal soundness' by preparing various improvement measures for efficient fiscal management.

First, to minimize the impact of the fiscal crisis, the city will establish a 'fiscal stabilization fund' and begin operating it from January 1 next year. The fiscal stabilization fund is a financial resource that accumulates more than 10% of net account surplus and more than 10% of the increase in operating general revenue of the previous year, which can be used in case of a fiscal crisis.

The city also plans to comprehensively improve fiscal project assessment, event and festival project assessment, and local subsidy assessment to enhance fiscal transparency and efficiency. Additionally, through a research project on measures to rationalize the operation of cooperating agencies, the city plans to establish a more sound fiscal management foundation.

Mayor Yeom Tae-young pledged, "From the first half of next year, we will implement efficiency plans to ensure that a financial crisis does not occur again."