Gyeonggi Province's Fiscal Self-Reliance Drops 11.3 Percentage Points in 4 Years, Double National Average

As the 9th popular election term of Gyeonggi Province announced a budget reduction of 770 billion won due to fiscal difficulties, it was revealed that both the fiscal self-reliance and fiscal independence rates of the province dropped by more than 11 percentage points over the four years of the 8th popular election term.

According to Gyeonggi Province's fiscal disclosure on the 17th, the fiscal self-reliance rate based on this year's main budget stands at 44.4%, a decline of 11.3 percentage points from 55.7% four years ago in 2022.

The national average fiscal self-reliance rate for cities and provinces this year is 32.3%, down 5.2 percentage points compared to 37.5% four years ago.

Although Gyeonggi Province, along with Seoul, is a non-local-share-allocation municipality and maintains a higher fiscal self-reliance rate than other metropolitan local governments, its decline over the past four years exceeded twice the national average.

Meanwhile, Gyeonggi Province's fiscal independence rate recorded 44.4% this year, marking an 11.9 percentage point drop compared to 56.3% four years ago.

Considering that the national average for cities and provinces dropped by 6.2 percentage points to 42.0% this year from 48.2% four years ago, the decline in Gyeonggi's fiscal independence was, much like its fiscal self-reliance, close to twice the average of other cities and provinces.


Fiscal self-reliance refers to the proportion of independent revenues, such as local taxes and non-tax revenues, out of the total general account revenue of a local government. Fiscal independence refers to the proportion of revenue that can be autonomously allocated and executed among total general account revenues.

The closer both indicators are to 100%, the higher the independence of fiscal operations.

The decline in fiscal self-reliance and fiscal independence is analyzed to be due to increases in government subsidies, carried-over funds from previous funds, and local government bond issuances compared to local taxes (provincial taxes) and non-tax revenues.

In fact, acquisition tax, which accounts for more than half of provincial tax revenue, plummeted from 11 trillion won in 2022 to 8 trillion won this year due to factors such as a decrease in real estate transaction volume.

On the other hand, local government bonds were issued for 943 billion won last year—the first time in 19 years since 2006—followed by an additional issuance of 718 billion won through this year's first supplementary budget proposal.
 

(Photo provided by Gyeonggi Province, Yonhap News)
※ Please note: This article was translated by AI and may contain errors.