Jeonju City is intensifying its efforts to secure a more equitable share of national funding, arguing that its role as a regional hub requires a fundamental shift in how the South Korean government calculates local allocation taxes. The city contends that while it provides metropolitan-level services to the broader region, the current funding formulas fail to account for the actual administrative burden placed on the city by non-resident users.
On the 13th, Yun Dong-wook, the Acting Mayor and Vice Mayor of Jeonju, visited the Ministry of the Interior and Safety (MOIS) to formally request an overhaul of the Ordinary Local Allocation Tax system. The push for increased funding comes as Jeonju seeks to align its fiscal capacity with its strategic role as a central hub within the Jeonbuk Special Self-Governing Province, ensuring that regional development projects can proceed without financial bottlenecks.
At the heart of the dispute is the concept of “living population”—the number of people who actually utilize a city’s infrastructure, regardless of where they are officially registered. Jeonju officials argue that the city effectively functions as a metropolitan center, absorbing the medical, educational, cultural, and welfare demands of residents from surrounding areas. However, under current regulations, the “living population” metric is primarily applied only to areas designated as population-declining zones, leaving hub cities like Jeonju underfunded relative to their actual service load.
Addressing the ‘Hub City’ Funding Gap
The discrepancy in funding has become a critical issue as Jeonju positions itself as a key pillar of the government’s “5 Poles, 3 Specials” national balanced development strategy. This strategy aims to decentralize economic and administrative power away from Seoul and the capital region by fostering strong regional hubs. Yun Dong-wook emphasized during his meeting with the Ministry of the Interior and Safety that for such a strategy to succeed, the funding mechanisms must reflect the practical administrative demands of these hub cities.
Specifically, the city has urged the Ministry to integrate living population and floating population indicators into the calculation of the Ordinary Local Allocation Tax. By recognizing the real-time demand for services, Jeonju argues the government can correct an “unreasonable” distribution of funds that currently overlooks the costs associated with maintaining high-capacity urban infrastructure for a regional population.
This fiscal challenge is not merely about bookkeeping. it is about the sustainability of public services. When a city provides metropolitan-grade healthcare and welfare to a floating population that does not contribute to its local tax base, the resulting financial strain can hinder the city’s ability to invest in its own long-term growth and the safety of its permanent residents.
Urgent Requests for Special Local Allocation Tax
Beyond the systemic changes to ordinary tax allocations, Jeonju is seeking immediate financial relief for specific regional priorities. During the visit to the Ministry of the Interior and Safety, Acting Mayor Yun requested Special Local Allocation Tax support for 26 separate projects. These initiatives, which total 16.5 billion KRW, are focused primarily on disaster prevention, public safety, and the resolution of pressing local issues.
The city maintains that these 26 projects are directly linked to the safety and convenience of its citizens. By securing these funds, Jeonju aims to mitigate risks in disaster-prone areas and upgrade urban infrastructure that has been stretched thin by the city’s expanding role as a regional center.
Key Funding Objectives for Jeonju City
| Funding Type | Primary Goal | Core Argument/Requirement |
|---|---|---|
| Ordinary Local Allocation Tax | Systemic Formula Reform | Include living and floating population metrics for hub cities. |
| Special Local Allocation Tax | Project-Specific Funding | 16.5 billion KRW for 26 projects in safety and disaster management. |
| Self-Effort Incentives | Internal Revenue Growth | Improve tax collection and expenditure efficiency. |
The Strategy for Fiscal Sustainability
While lobbying the central government for a fairer deal, Jeonju is also looking inward to improve its own financial health. The city has announced plans to maximize “self-effort incentives,” which are bonuses awarded by the central government to municipalities that demonstrate excellence in fiscal management.
To achieve this, the city administration is developing detailed management plans focused on two main pillars: the optimization of tax revenue collection and the enhancement of expenditure efficiency. By implementing a rigorous monitoring system to track these metrics, Jeonju hopes to increase its score in the Ordinary Local Allocation Tax calculation, thereby securing more autonomous funding.
This dual-track approach—challenging the national allocation formula while tightening internal fiscal discipline—reflects a broader trend among South Korean regional cities struggling to maintain growth amidst a national demographic shift and an uneven distribution of central government resources.
As Jeonju continues to serve as the administrative and cultural heart of the Jeonbuk Special Self-Governing Province, the outcome of these negotiations with the Ministry of the Interior and Safety will likely serve as a bellwether for other regional hub cities seeking similar recognition of their “metropolitan functions.”
The city now awaits a response from the Ministry of the Interior and Safety regarding the requested 16.5 billion KRW in special funding and the potential for systemic changes to the allocation tax formula. Further updates on the approval of these projects and the revised funding metrics are expected as the central government reviews its balanced development budget.
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