Incheon City Secures Record High National Budget of 6.9 Trillion Won... General Grants Tax of 1 Trillion Won

Incheon City has secured a record-breaking national budget of 6.8729 trillion KRW this year. This includes 5.8697 trillion KRW in national subsidies and 1.0032 trillion KRW in general local allocation tax.

This marks an increase of 435.2 billion KRW (6.8%) from last year's 6.4377 trillion KRW, setting a new record. Despite challenging conditions such as the unprecedented government revenue shortfall and fiscal austerity, Incheon City exceeded its initial target of 6.19 trillion KRW by 682.9 billion KRW (11.0%).

The national subsidies increased by 384.6 billion KRW (7.0%) compared to the previous year, significantly surpassing the government's total expenditure growth rate of 3.2%. The city explained that this achievement is meaningful as it was accomplished despite the National Assembly’s budget proposal reflecting only cuts without any increases.

Additionally, the general local allocation tax, whose total resources increased by 0.9% from the previous year, saw Incheon securing 1.0032 trillion KRW, a 5.3% (50.6 billion KRW) increase from the previous year. The general local allocation tax, which the government allocates 19.24% of domestic taxes to local governments, is a very important autonomous revenue source that local governments can use freely without restrictions, unlike national subsidies that support specific project budgets.

Recent 4-Year National Funding Status. Provided by Incheon City

Mayor Yoo Jeong-bok of Incheon emphasized the need for support for local governments to actively promote policies related to childbirth and childcare, as well as for the preservation of border areas with high security threats, leading to the additional securing of general local allocation tax.

In fact, demands made by Incheon City and others for expanding low birthrate and childcare support (child population ratio from 30% to 33%), increasing support needs for border areas (from 40% to 50%), and extending the sunset clause for job creation demand by three years were reflected in the revised "Enforcement Rules of the Local Allocation Tax Act" amended in December last year, and included in the calculation of general local allocation tax demand.

The national budget secured by Incheon City this time includes ▲3.63 trillion KRW for the Metropolitan Area Express Railway (GTX-B) ▲79.3 billion KRW for the extension of Seoul Subway Line 7 to Cheongna ▲35 billion KRW for Incheon-origin KTX ▲23.2 billion KRW for the distribution and expansion of Smart Villages ▲120.4 billion KRW for senior citizen job support, among others.

Mayor Yoo said, "Through Incheon City’s proactive administration and close cooperation with the central government and the National Assembly, we have secured a national budget exceeding 6 trillion KRW for three consecutive years. Especially, the additional budget secured by achieving 1 trillion KRW in general local allocation tax will be used to enhance citizens’ happiness and for major projects for Incheon’s future."