Chul Lee of Gwangju City Council: "City's Fiscal Disorder... Comprehensive Reform Needed"

Criticism Over Local Bond Conversion and Improper Fund Management
City Responds: "Budget Prepared Considering Urgency and Priorities"

Chul Lee, Gwangju City Council Member.

Chul Lee, a member of the Gwangju City Council (Democratic Party, Seo-gu District 4), pointed out the overall disorder in Gwangju City's fiscal management and called for comprehensive reform during the '5-Minute Free Speech' session at the 2nd plenary meeting of the 333rd extraordinary session on June 30.

In his remarks, Councilor Lee criticized the following: the excessive conversion of projects in the main budget to local bonds, the potential burden of 860 billion won resulting from the diversion of funds and special accounts that have lost their original purpose, and attempts to undermine the council's deliberative authority by abusing the deposit system.

He stated, "Just six months ago, 85.2 billion won in project funds, which were to be executed as general revenue, have now been converted into local bonds, that is, debt, in this supplementary budget." He condemned this as "not a simple change of plan, but a clear 'bankruptcy of trust' and an act that has rendered the council's budget deliberation authority meaningless." He emphasized, "We can no longer tolerate the lax fiscal management of 'starting projects first and covering the cost with debt later.'"

Lee further warned, "Behind the structural problems of the city's finances lies a massive fiscal burden of 860 billion won that will inevitably have to be covered someday." He pointed out, "Funds and special accounts originally established for purposes such as citizen welfare and regional development are being diverted to cover the city's insufficient general resources. This undermines fiscal discipline and causes citizens' valuable assets to drift without purpose."

In particular, Lee cited the handling of 14.7 billion won in public contribution funds for the Jeonbang and Ilsin Textile sites as a "representative example of weakening the council's deliberative authority." He criticized, "The executive branch is attempting to bypass council deliberation by classifying the transfer of funds between accounts?which should go through council review under the Local Finance Act?as 'deposits' rather than 'entrusted funds.' This opens a channel for internal deliberation alone to divert budget funds, which is a serious issue that renders the council's budget deliberation and decision-making rights hollow."

Lee proposed an alternative, stating, "Gwangju City should no longer simply repeat that there are no funds. Instead, it must completely reevaluate the urgency and priority of all projects and boldly reconsider even mayoral pledges based on efficiency."

He also emphasized, "At this critical juncture, when we must lead national development together with the Lee Jaemyung administration, Gwangju City cannot fulfill its rightful roles and responsibilities with the current fiscal situation. I strongly urge that, together with citizens and the council, we open a new era of success and a future for Gwangju based on a 'truthful budget' and 'sound finances.'"

In response, Gwangju City explained in a statement released the same day, "The reason for converting some city-funded projects in the main budget to local bonds in the first supplementary budget is that, while revenue decreased due to a reduction in local allocation tax and tax income, expenditure needs increased due to statutory and mandatory expenses and city matching funds for national projects. Therefore, resources were shifted to projects eligible for local bond issuance (such as SOC and disaster prevention and recovery projects)."

Regarding the diversion of funds and special accounts for general revenue purposes, the city stated, "According to the Local Finance Act, the Basic Fund Management Act, and individual fund and special account ordinances, it is possible to lend surplus resources from the regional development fund, various funds (15 in total), and special accounts to the general account. Like other local governments nationwide, our city operates within a range that does not cause difficulties in the management of each fund and special account."

The city added, "Currently, when preparing the budget, we adjust the timing of budget allocation by considering the urgency, necessity, and priority of projects. We are also simultaneously pursuing expenditure restructuring, such as performance analysis and the integration of similar or overlapping projects."