Reduction of Education Grants and Spending Restructuring...Field Education Offices Say "No More Funds to Use"

Approximately 4 Trillion Won Cut from 'Education Grants'
Revision of Enforcement Decree on Cash Welfare Expenditure Management
"Concerns Over Financial Deterioration in Disappearing Regions"

As the government announced plans to reduce local education finance grants to cover this year's tax revenue shortfall, it has moved to amend the enforcement decree to reduce cash expenditures targeting metropolitan and provincial education offices. However, some education offices have voiced concerns that the grant cuts and expenditure restructuring will cause significant damage. There are also worries that the amendment to the enforcement decree will further widen financial disparities between regions.

Grant Reduction of Over 40 Trillion Won, Managing 'Cash Expenditures'

[Image source=Yonhap News]

On the 29th, the Ministry of Education announced that the Cabinet reviewed and approved the amendment to the "Local Education Finance Grants Act Enforcement Decree" containing these measures. The local education finance grant system allocates funds secured through domestic taxes to metropolitan and provincial education offices to ensure that all students nationwide receive quality education. Although the original budget for this year was set at 68.9 trillion won, the government plans to allocate 64.6 trillion won, about 4.3 trillion won less, following the "Fiscal Response Plan Based on the 2024 Tax Revenue Re-estimation" announced on the 28th.

Through the amendment, the Ministry of Education aims to improve spending efficiency in metropolitan and provincial education offices. First, to reduce cash welfare expenditures, a penalty item will be introduced. The enforcement decree will add a "ratio of self-managed social security benefit expenditures" under the "Support for Efficient Fiscal Execution" section, allowing the government to manage cash welfare expenses independently pursued by education offices. Additionally, education grants will be allocated for facility projects considering the actual capacity for execution.

On the other hand, grant support will be expanded for new policy areas promoted by the government. Support will increase for new projects such as Neulbom Schools (approximately 300 billion won), teacher workload and capacity development (530 billion won), establishment of basic academic support systems (350 billion won), subsidies for lifelong education facility costs (86 billion won), and AI (artificial intelligence) digital textbooks.

Field Education Offices: "Funds Will Soon Be Depleted"

[Source=Ministry of Education]

However, metropolitan and provincial education offices are expressing difficulties over the reduction in education grants. A representative from Education Office A told Asia Economy on the 30th, "This cut has reduced the budget by about 204.5 billion won compared to the previous budget," adding, "Our financial situation is probably the worst in the country." They continued, "Other regions say they are using the Integrated Fiscal Stabilization Fund, but our education office has already exhausted the fund usage limit and cannot utilize it further," and said, "We will have to adjust some projects and proceed with a supplementary budget reduction."

A representative from Education Office B said, "We will probably have to use about 280 billion won of the remaining fund," but expressed concern, "If we include it in this year's supplementary budget and continue to use it in next year's main budget and beyond, it is likely to be depleted quickly."

A representative from Education Office C also said, "Education offices that can use the fund will utilize it, but those like us that can no longer use the fund will respond by cutting existing expenditure budgets." Regarding the Ministry of Education's amendment to the enforcement decree, they explained, "We simply receive the information; the metropolitan and provincial education offices are not consulted or involved in policy decisions."

A representative from Education Office D said, "Since cash expenditures are not very high, the amendment to the enforcement decree does not cause significant damage," adding, "Rather, securing the local education tax from tobacco consumption tax and funding for free high school education, which are at risk of expiration, is necessary."

Expenditure Restructuring and "Incentives for AI Textbook Policy?"

Amendment to the Enforcement Decree of the Local Education Finance Grant Act. [Source: Ministry of Education]

Some in the education sector have expressed concerns that the amendment to the enforcement decree will further widen regional financial disparities. According to the amendment, new grant allocation items such as "Neulbom School and After-School Program Expenses," "Teacher Training Operation and Support," and "Basic Academic Guarantee Support" have been added. The detailed criteria include the number of classes, students, and teachers, respectively.

Kim Beom-ju, a researcher at the National Assembly Legislative Research Office (Ph.D. in Education), said, "Among education finance scholars, there has long been discussion that strengthening student numbers as a criterion for grant distribution is not desirable," adding, "This could worsen the finances of declining regions." He also pointed out, "In the case of digital textbooks, the more schools select the textbooks, that is, the more students in the area, the larger the grant amount becomes," and noted, "This can be seen as an incentive used by the Ministry of Education to better implement policies."

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