Gyeongbuk Province Predicts 480 Billion KRW Funding Reduction Next Year... "Will Implement Strong Expenditure Restructuring"

Reviewing Investment Projects from Scratch... Department Sealing System, Policy to Reduce Operating Expenses

More than 250 employees of the Gyeongbuk Provincial Office, including Governor Lee Cheol-woo, participated in the "Thanks Challenge" on May 6.

[Asia Economy Yeongnam Reporting Headquarters Reporter Park Dong-wook] Gyeongsangbuk-do predicted that next year's revenue will decrease by more than 340 billion KRW compared to this year due to the economic downturn caused by the novel coronavirus infection (COVID-19), while expenditure demand will increase by 140 billion KRW, resulting in a financial burden increase of 480 billion KRW.

Accordingly, on the 12th, it announced that it decided to overcome the difficult financial situation through bold expenditure restructuring and focus investment to restore economic vitality.

Gyeongbuk Province expects the economic crisis to continue for the time being and officially began the 2021 budget formulation process by holding a meeting on the day to share the difficult financial situation and measures to overcome the financial crisis with all budget officers of each department.

The decrease in next year's revenue includes parts linked to national taxes such as local consumption tax (72 billion KRW) and local allocation tax (46 billion KRW), local taxes such as acquisition tax (20 billion KRW) and leisure tax (3 billion KRW), and surplus funds of 70 billion KRW that were used as resources for the following year from the execution balance each year. In addition, the internal transaction (debt) scale of 130 billion KRW used when formulating this year's main budget also acts as a factor reducing available resources for next year, so a total decrease of 480 billion KRW in resources is expected.

In this regard, it was decided to prioritize reducing administrative operating expenses of the civil servant organization and also reduce annual repetitive and sunset projects in investment projects, prioritize new projects for economic recovery, and focus on restoring economic vitality through bold expenditure restructuring.

First, all civil servants including the governor will take the lead in overcoming the financial crisis by reducing office operating expenses and civil servant welfare expenses by 10 to 40%. In addition, regarding local subsidies (private and autonomous organization subsidies), projects with poor performance evaluation results and projects that cannot be promoted within the year will be boldly terminated, and all projects will be collectively re-examined and restructured from zero base.

For self-funded projects worth 1.2 trillion KRW excluding statutory and personnel expenses, preliminary restructuring will be conducted first, and department heads will be given the authority to decide priorities and reflection scale of self-funded projects within a certain financial limit. To ensure autonomy and responsibility in budget formulation and efficient financial management, a department ceiling system will be introduced and operated.

Furthermore, projects that have been conventionally formulated will be boldly organized, and to minimize unused funds for major SOC projects such as local roads and office relocation construction, budgets will be formulated based on feasibility criteria, concentrating limited resources on regional economic revitalization projects.

Governor Lee Cheol-woo emphasized, "The economic crisis is expected to continue until next year, so our province's financial situation is really difficult, but the governor and provincial government officials will take the lead in reducing administrative expenses first to gain public consensus and overcome the financial crisis."

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