Growing Local Matching Fund Burden Leads to Strategic Choices
Jeong Cheolwon: "Focusing on Resident-Centered Welfare"
Damyang County has decided not to participate in the Ministry of Agriculture, Food and Rural Affairs' "Basic Income Pilot Project for Farming and Fishing Villages" due to the increased financial burden caused by the expansion of central government subsidies. Provided by Damyang County
As the central government's budget proposal for next year shifts toward an "expansionary fiscal" policy, local governments are facing increased financial burdens. In this context, Damyang County in South Jeolla Province has decided not to participate in the Ministry of Agriculture, Food and Rural Affairs' "Basic Income Pilot Project for Farming and Fishing Villages." Analysts interpret this as a strategic choice by the county to provide tangible benefits to its residents within a limited budget.
The National Assembly and local governments have expressed concerns over the annual increase in matching local funds required from local governments due to the expansion of central government subsidy programs. In particular, small local governments at the county level are facing an extremely limited scope for autonomous fiscal management, as their low financial self-reliance makes it difficult to meet the matching fund requirements for large-scale national projects.
According to the county on October 22, available county funds for the 2026 main budget are estimated at around 290 billion won. However, approximately 180 billion won of this will be allocated as matching funds for major national and provincial projects such as the Damyang Lake Ecological Trail and the International Meditation Center. When adding 70 billion won for personnel expenses, more than 250 billion won-87% of available funds-will be tied up in mandatory expenditures. As a result, the county will have only about 40 billion won in discretionary funds that can be freely used.
Given this fiscal structure, Damyang County judged that participating in the "Basic Income Pilot Project for Farming and Fishing Villages" could threaten the county's fiscal soundness. If the county were to participate, the annual local matching fund required would reach 29.1 billion won, which is more than 70% of the county's available funds. While the project could have a positive impact on local residents, the decision not to participate is seen as unavoidable after comprehensively considering long-term fiscal sustainability and policy priorities.
A county official explained, "Rather than focusing solely on short-term support effects, it is more important to pursue sustainable and responsible policies tailored to local conditions. At present, the most rational choice is to concentrate our limited budget on projects that residents can truly feel and benefit from."
In fact, after Damyang County was designated a special disaster area due to heavy rains in July, it secured a recovery budget of 123 billion won and has been focusing its administrative efforts on restoring rivers, roads, and agricultural infrastructure, as well as providing disaster relief payments to affected residents. The county is also prioritizing resident-focused welfare and infrastructure projects, such as incorporating 1,857 civil complaints received through "Conversations with Residents" into county administration.
County Governor Jeong Cheolwon stated, "If the cost-sharing structure between national and local governments for the Basic Income Pilot Project for Farming and Fishing Villages is improved in the future, we will actively apply according to circumstances. As long as a policy helps improve the lives of our residents, we will always be open to pursuing it."
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