[ANALYSIS] Gyeonggi Province faces sustainability test as spending cuts meet resistance

Gyeonggi Province’s fiscal strain is prompting debate over how to sustain rising spending amid volatile revenues. Welfare expenditure and matching contributions for centrally funded programs have increased sharply, while the consolidated fiscal balance has remained in deficit since 2022. The province restored child care funding on Oct. 12 after protests, underscoring the political difficulty of reducing established benefits. Experts called for funding reform and cautious assessment of long-term program costs.

Gyeonggi Province’s budget reached 42.21 trillion won in 2026 after a supplementary budget.

Welfare expenditure rose from about 7.01 trillion won in 2018 to 18.86 trillion won in 2026.

Provincial matching contributions for centrally funded programs increased from about 1.4 trillion won to 2.7 trillion won over the same period.

Acquisition tax revenue, which accounts for about half of the province’s tax receipts, fell sharply amid a slowdown in property transactions.

The province’s second supplementary budget initially excluded 2.7 billion won for child care operations and staff through December, but the funding was restored after protests and included in the budget approved on Oct. 12.

Published Oct 19, 2026 4:04 pm KST

Experts call for funding reform as rising obligations squeeze budgets

Gyeonggi Gov. Choo Mi-ae speaks about the province’s financial situation during a press conference at the provincial government headquarters in Suwon, Gyeonggi Province, Aug. 5. Newsis

Gyeonggi Province’s fiscal emergency is exposing a growing dilemma for local governments nationwide: how to meet rising spending obligations with volatile revenues when attempts to cut funding face strong resistance.

Gyeonggi Gov. Choo Mi-ae’s warning about the finances of Korea’s most populous province, followed by the restoration of child care funding after intense protests, has highlighted both the need for reform and the political obstacles to carrying it out.

Experts differ on how much weight to give funding reform and spending cuts, but agree that municipal governments must assess whether they can sustain their commitments over the long term.

The numbers illustrate the strain. According to the province, its budget this year reached 42.21 trillion won ($32 billion) after a supplementary budget. Welfare expenditure increased from about 7.01 trillion won in 2018 to 18.86 trillion won in 2026, while provincial matching contributions for centrally funded programs nearly doubled from about 1.4 trillion won to 2.7 trillion won.

The province’s consolidated fiscal balance has remained in deficit since 2022, which means spending has consistently exceeded revenue on that measure.

Meanwhile, acquisition tax revenue — which accounts for about half of the province’s tax receipts — has fallen sharply amid a slowdown in property transactions.

Lee Sang-min, a researcher at the think tank Fiscal Reform Institute, told The Korea Times that the more fundamental problem lies in how resources are shared between the central and regional governments.

“More than anything, this is a structural problem,” Lee said, calling for changes to funding arrangements to give the province more room to address local needs.

A researcher at another think tank, the Korea Institute of Local Finance, noted Gyeonggi’s growing population adds to its financial burden, as it increases the number of beneficiaries of centrally subsidized welfare programs that require local matching contributions.

But shifting more of those costs to the central government would not, by itself, ensure long-term sustainability, she said. Governments at both levels must assess the continuing costs of such programs before introducing them, rather than proceeding simply because they look affordable in the short term.

She cited cash assistance programs that were introduced or expanded since the pandemic as examples of spending whose long-term affordability should be reviewed.

As policymakers consider potential changes to the tax system, she said they should examine whether local governments nationwide can sustain the growing cost of national programs.

The difficulty of reducing benefits was illustrated by the province’s recent reversal on child care subsidies. Its second supplementary budget proposal initially excluded 2.7 billion won sought to maintain support for child care operations and staff through December. Following protests, the funding was included in the budget approved on Oct. 12.

Kim Gi-seung, a professor at Pusan National University, said such benefits become politically difficult to undo once recipients grow accustomed to them.

“Once people start receiving support, they complain and protest if it is reduced or revoked,” Kim said.

Asked whether the province could repair its finances, he said, “It is difficult, but failing to act will lead to financial ruin.”

The dilemma extends beyond Korea. In France, protests over deteriorating public services have unfolded alongside government efforts to curb spending and public debt, highlighting the politically fraught question of who should bear the cost of restoring fiscal stability.

Kim said the aging population and growing demand for welfare services would continue to push spending higher in Korea, making caution over new commitments essential.

“Spending needs to be planned very cautiously,” he said, adding that Choo deserved credit for openly acknowledging the province’s financial difficulties.

Gyeonggi Provincial Council member Choi Ji-won said strong opposition from legislators and the education sector had helped protect the child care funding this time, but could push the province to seek savings elsewhere.

“We are worried that other groups could follow suit with protests of their own,” Choi said, noting that protecting funding in one area could mean cuts elsewhere.

京畿道财政紧张，引发了关于如何在收入波动的情况下维持不断增长的支出的讨论。福利支出和中央资助项目的配套资金大幅增加，而自2022年以来，综合财政收支一直处于赤字状态。在抗议活动之后，该省于10月12日恢复了儿童保育拨款，凸显了削减既有福利的政治难度。专家呼吁进行资金改革，并谨慎评估项目的长期成本。

京畿道2026年预算在追加预算后达到42.21万亿韩元。

福利支出从 2018 年的约 7.01 万亿韩元增加到 2026 年的 18.86 万亿韩元。

同期，省级政府对中央资助项目的配套资金从约 1.4 万亿韩元增加到 2.7 万亿韩元。

由于房地产交易放缓，占该省税收收入约一半的购置税收入大幅下降。

该省第二份补充预算最初不包括用于托儿机构运营和人员的 27 亿韩元（截至 12 月），但在抗议之后，这笔资金得以恢复，并纳入了 10 月 12 日批准的预算中。

发布于2026年10月19日下午4:04（韩国标准时间）

专家呼吁改革资金筹措制度，因为不断增长的债务挤压了预算。

8月5日，京畿道知事秋美爱在京畿道水原市省政府大楼举行的新闻发布会上，就该省的财政状况发表讲话。（Newsis）

京畿道的财政危机暴露了全国地方政府日益面临的困境：如何在收入不稳定的情况下满足不断增长的支出义务，同时削减资金的尝试会遭到强烈抵制。

京畿道知事秋美爱就韩国人口最多的省份的财政状况发出警告，随后在激烈的抗议之后恢复了儿童保育资金，这既凸显了改革的必要性，也凸显了实施改革所面临的政治障碍。

专家们对于资金改革和削减开支应该重视多少存在分歧，但他们一致认为，市政当局必须评估他们是否能够长期维持其承诺。

这些数字反映了财政压力。据该省统计，今年在追加预算后，其预算总额达到42.21万亿韩元（约合320亿美元）。福利支出从2018年的约7.01万亿韩元增至2026年的18.86万亿韩元，而省级政府对中央资助项目的配套资金几乎翻了一番，从约1.4万亿韩元增至2.7万亿韩元。

自 2022 年以来，该省的综合财政收支一直处于赤字状态，这意味着按该指标衡量，支出一直超过收入。

与此同时，由于房地产交易放缓，占该省税收收入约一半的购置税收入大幅下降。

智库财政改革研究所的研究员李相民告诉《韩国时报》，更根本的问题在于中央政府和地方政府之间如何分配资源。

李说：“归根结底，这是一个结构性问题”，他呼吁改变资金安排，让该省有更多空间来解决当地的需求。

另一家智库——韩国地方财政研究院的一位研究人员指出，京畿道不断增长的人口增加了其财政负担，因为这增加了需要地方配套资金的中央补贴福利项目的受益人数。

但她表示，仅仅将更多成本转嫁给中央政府并不能确保长期可持续性。各级政府都必须在推行此类项目之前评估其持续成本，而不是仅仅因为短期内看起来可行就贸然实施。

她以疫情期间推出或扩大的现金援助计划为例，指出这些支出的长期可负担性应该进行审查。

她表示，政策制定者在考虑对税收制度进行潜在改革时，应该考察全国各地的地方政府是否能够承担国家项目不断增长的成本。

该省近期调整托儿补贴政策，凸显了削减福利的难度。其第二份补充预算提案最初排除了27亿韩元，这笔资金原本旨在维持托儿机构运营和人员配备直至12月。在民众抗议后，这笔资金最终被纳入10月12日批准的预算案中。

釜山国立大学教授金基胜表示，一旦受益者习惯了这些福利，那么在政治上就很难取消这些福利。

金说：“一旦人们开始获得支持，如果支持减少或取消，他们就会抱怨和抗议。”

当被问及该省能否修复财政状况时，他表示：“这很困难，但如果不采取行动，将会导致财政崩溃。”

这种困境并非韩国独有。在法国，民众对公共服务恶化的抗议与政府控制支出和公共债务的努力同时爆发，凸显了谁应该承担恢复财政稳定的成本这一充满政治争议的问题。

金表示，人口老龄化和对福利服务日益增长的需求将继续推高韩国的支出，因此对新的承诺保持谨慎至关重要。

“支出需要非常谨慎地计划，”他说，并补充说，朱先生公开承认该省的财政困难，值得称赞。

京畿道议员崔智媛表示，立法者和教育界的强烈反对帮助保住了这次的托儿经费，但可能会迫使该省在其他方面寻求节省开支。

崔表示：“我们担心其他团体可能会效仿，举行自己的抗议活动。”他指出，保护某一领域的资金可能意味着削减其他领域的资金。