Key Issues in Grant Fund Reorganization According to the Seoul Superintendent

Abolition of National Tax Linkage, Reduction of the 20.79% Grant Rate, and Inclusion of Excess Tax Revenues

Geun-sik Jeong: "Core Issues Are Being Conflated in the Current Grant Fund Debate

We Must Distinguish and Address Each Key Issue Separately"

"There are three hidden key issues in the current debate over the reorganization of educational grant funds: abolishing the current linkage to national tax revenues, adjusting the fixed grant rate of 20.79%, and handling excess tax revenues. Since these issues are interwoven but fundamentally different in nature, they must be discussed separately in order to form a clear position."

Jeong Geunsik, Superintendent of Education for Seoul Metropolitan Office of Education, is speaking about the reorganization of the grant system during a luncheon event with the press corps held at the Seoul Metropolitan Office of Education on the 18th. Seoul Metropolitan Office of Education

On August 18, Geun-sik Jeong, Superintendent of the Seoul Metropolitan Office of Education, made these remarks at a luncheon with the press corps held at the Seoul Metropolitan Office of Education regarding the government's ongoing plans to restructure local education finance grants. He pointed out that issues concerning the educational grant system are being conflated in current discussions, emphasizing that the abolition of the national tax linkage, the adjustment of the current 20.79% grant rate, and how to handle excess tax revenues should each be examined independently.

First, regarding the abolition of the current educational grant funds’ linkage to national tax revenues, Superintendent Jeong characterized it as a "paradigm issue." He explained, "Abolishing the national tax linkage and switching to a growth-rate linkage is not the same as reducing the grant rate of 20.79%." The Ministry of Planning and Budget has proposed scrapping the current method of automatically allocating 20.79% of national taxes. Instead, they suggest setting total grant fund amounts by multiplying the three-year average nominal growth rate with the school-age population change rate.

Superintendent Jeong went on to say, "The national tax linkage system has served as a backbone for strengthening human capital on our path toward becoming a developed nation over the past 50 years. There are concerns about whether dismantling this system aligns with our current pursuit of becoming an education-driven country." He also expressed concern about using the three-year average nominal growth rate as the basis, pointing out that "this corresponds to the period with the lowest growth rates." He added, "While personnel expenses for all education offices have increased by about 3% on average, if financial increases lag behind this, it will ultimately mean reductions in project funding."

Superintendent Jeong argued that discussions on abolishing the national tax linkage should be separated from those about reducing the grant rate from 20.79%. He asserted his stance on maintaining the current grant rate, saying, "We can simply invest more in areas such as early childhood and lifelong education while keeping the 20.79% rate." The educational grant fund was first introduced in 1972 at 11.8% of national tax revenue, and has remained at 20.79% since being raised to this level in 2020.

Another issue Superintendent Jeong highlighted is whether to include excess tax revenues in calculating the 20.79% grant rate when total tax collected exceeds expectations. He noted, "It is another distinct issue if the calculation method is modified by changing the numerator and denominator so that excess tax revenues are excluded," emphasizing that the grant fund reorganization debate is a complex mix of such issues, each of which must be distinguished to form an accurate position.

He also raised the discussion process itself as a separate issue, regardless of whether people support or oppose the government's proposed changes. Superintendent Jeong criticized the lack of sufficient input from city/provincial superintendents and education organizations, despite the fundamental nature of these changes to the local education finance system. He stated that, during a meeting with the Minister of Education and the Minister of Planning and Budget on August 15 at the Liberation Day event, he conveyed his view: "The government should provide a detailed explanation of the restructuring plan and seek opinions from superintendents."

He pointed out that, as of now, the Education Ministry and the Ministry of Planning and Budget have not completely aligned their positions, and the content and timing of the government's final plan remain unclear.

The Council of National Education Superintendents of which Superintendent Jeong is the chair, plans to hold an emergency meeting regarding the grant fund issues on August 19 to discuss response measures and additional strategies.

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