Incheon City, Record High National Subsidy of 6.4 Trillion Won... Increase in General Grants Including Institutional Improvements

Incheon City has secured a record-breaking national budget of 6.4377 trillion KRW this year. The city announced on the 5th that it secured 5.4851 trillion KRW in national subsidies and 952.6 billion KRW in general grants, achieving over 6 trillion KRW in national funds for two consecutive years despite difficult national financial conditions.

The general grant, which the government allocates 19.24% of domestic taxes to local governments, differs from national subsidies that support specific project budgets in that local governments can use it autonomously without restrictions on its purpose. The general grant compensates for the shortfall between financial demand and revenue; if local tax and other own revenues are high, the grant amount decreases. The financial revenue estimation is based on future projections and is fully reconciled after the final accounts.

Initially, Incheon City expected a significant decrease in this year’s general grant due to actual own revenues exceeding the 2022 estimate by 169.4 billion KRW. However, it secured 952.6 billion KRW, an increase of 70.2 billion KRW (8.0%) compared to the previous year’s final budget of 882.4 billion KRW.

Incheon City 2024 National Budget Secured Status [Provided by Incheon City]

Mayor Yoo Jeong-bok of Incheon City made active efforts, including proposing system improvements to the Minister of the Ministry of the Interior and Safety and related officials, to secure additional general grants. The city’s proposals included ▲ rational improvement of revenue estimation methods ▲ doubling cooperation demand and extending sunset clauses for local governments hosting NIMBY facilities such as landfill sites ▲ strengthening foreigner demand (weight increased from 105% to 110%). These were incorporated into the revised 'Local Allocation Tax Act Enforcement Rules' in December last year, resulting in approximately 110 billion KRW being additionally reflected in the demand and revenue of the general grant.

Additionally, Incheon City previously secured 5.4851 trillion KRW in national subsidies this year. This represents an 8.3% increase compared to the previous year’s secured amount. Considering that the government’s total expenditure growth rate is 2.8%, the lowest in 19 years since 2005, this is a meaningful achievement and the largest amount of national funds ever secured, according to the city.

Mayor Yoo said, "In a fiercely competitive environment among local governments for securing national funds, we achieved the result of securing general grants in the 950 billion KRW range. We will use these valuable resources to promote citizen happiness policies and resolve pressing livelihood issues."

This content was produced with the assistance of AI translation services.