Rep. Lee Hyung-seok Proposes 'Local Finance Act Amendment' to Expand Autonomous District Finances

[Asia Economy Honam Reporting Headquarters Reporter Yoon Jamin] Representative Lee Hyung-seok (The Democratic Party of Korea, Gwangju Buk-gu Eul) has taken the lead in proposing an amendment to the Local Finance Act to expand the finances of autonomous districts.

The amendment proposed by Representative Lee includes provisions to have the ratio of adjustment grants autonomously distributed by special and metropolitan cities to autonomous districts determined by presidential decree instead of the current ordinance.

Adjustment grants refer to grants distributed by metropolitan local governments to basic local governments to adjust financial disparities between local governments.

Currently, the grant rate of adjustment grants distributed by provincial-level metropolitan local governments to frontline cities and counties is set at 27%, as stipulated in Article 29 of the Local Finance Act.

In contrast, the ratio of adjustment grants distributed by special and metropolitan cities to their autonomous districts is autonomously determined according to ordinances (Article 29-2 of the Local Finance Act).

Therefore, the Ministry of the Interior and Safety announced a recommended grant rate for adjustment grants to autonomous districts of special and metropolitan cities in 2015 to prevent financial shortages in autonomous districts due to the distribution ratios set by special and metropolitan city ordinances.

However, the current grant rates for adjustment grants to autonomous districts in special and metropolitan cities fall short of the Ministry of the Interior and Safety’s recommended rates, leading to concerns about financial shortages in autonomous districts and insufficient effects in reducing financial disparities among autonomous districts.

Representative Lee stated, “Since the distribution ratio of adjustment grants to autonomous districts in special and metropolitan cities is delegated to ordinances, the adjustment grants are being distributed at rates lower than the Ministry of the Interior and Safety’s recommended rates. As a result, financial shortages in autonomous districts are occurring accordingly. Therefore, I have prepared an amendment to the Local Finance Act to raise the distribution ratio of adjustment grants to be determined by presidential decree so that special and metropolitan cities comply with the Ministry of the Interior and Safety’s recommended grant rates.”

He added, “While the autonomy of special and metropolitan cities is important, it is also very important for the government to uphold the recommended grant rates for adjustment grants to resolve financial disparities among autonomous districts. We will explore various measures, including expanding adjustment grants to autonomous districts, to further strengthen the finances of autonomous districts.”

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