DAEGU — Daegu Mayor Choo Kyung-ho said on the 3rd that he opposes the government's plan to channel into a new state fund revenue that should instead flow to local governments as local shared tax grants.
Choo made the remarks in a statement on the government's plan to create and operate a Future Response Fund, saying that local problems are best understood and addressed by local governments themselves.
In the statement, Choo said that under the government's plan to secure funding for the Future Response Fund, local shared tax grants would fall by about 30.5 trillion won nationwide from current levels, with Daegu estimated to lose about 700 billion won on an ordinary grant basis.
He added that the decline in local shared tax grants raises serious concerns about scaled-back priority projects outside the greater Seoul area, a deterioration in the quality of essential administrative services and additional issuance of local government bonds.
Using revenue that should be transferred as local shared tax grants for a central government fund amounts to a lack of trust in local governments, he said, arguing that creating a local account within the Future Response Fund cannot serve as an alternative to reduced grants.
Choo said preparing for the future is a national task that requires central and local governments to pool their wisdom as equal partners. He urged the government to transparently disclose the impact of the new fund on the finances of each local government and to review its operating plan to ensure mutual benefit, taking full account of local governments' views.
The government said on Sept. 1 that it would build a fund of about 162 trillion won, drawing on additional tax revenue and other sources, and spend it across four areas: young adults, growth drivers, regional development, and education and talent.
