SUWON — Gyeonggi Province has approved a 525.4 billion won ($380 million) supplementary budget to keep essential welfare programs running through the end of the year, even as falling local tax revenue strains its finances. The package fills gaps in welfare and school meal programs that received only nine months of funding in the original budget. Officials warned, however, that available funds will shrink further next year, prompting the province and its council to jointly push for an overhaul of the local tax system.
The provincial council passed the second revised budget for 2026, totaling 42.2053 trillion won, at a plenary session on the 12th, the province said. That is 525.4 billion won more than the 41.6799 trillion won approved in the first revision. The general account rose by 275.1 billion won and special accounts by 250.3 billion won.
The revision focused on maintaining statutory expenses and essential welfare programs despite deteriorating finances caused by lower local tax receipts. The province adjusted some program budgets based on whether funds could be spent within the year and how urgent the programs were, then concentrated the freed-up money on support for vulnerable groups and on health care.
The package targeted programs whose full-year costs were not covered in the original budget. It allocated 123.4 billion won for long-term care facilities and home care benefits for older adults, 58.4 billion won for meal subsidies at kindergartens and elementary, middle and high schools under the provincial education office, 21.5 billion won for farmers' and fishers' opportunity income, 16.3 billion won for youth basic income and 7.5 billion won for meal support for children at risk of going without food. Some of these programs had received only nine months of funding in the original budget; the revision secured the remaining three months so support would not be cut off before year-end.
Welfare for vulnerable groups and essential medical services were also reinforced. Additional allocations included 38.9 billion won for medical aid, 22.3 billion won for fertility treatment subsidies, 11.5 billion won for postpartum and newborn health care, 3 billion won for personal assistance benefits for people with disabilities and 600 million won for state-funded vaccinations.
During council deliberations, 21.6 billion won was added across 17 provincial programs, funded by cutting the reserve fund. Major increases included 3.6 billion won for postpartum care subsidies, 3.1 billion won for the Gyeonggi Market Revitalization Agency, 2.4 billion won for mobility support centers and 1.9 billion won for unmanned enforcement equipment. The council also approved 1.9 billion won for universal provision of sanitary products for adolescent girls, 1.5 billion won for fruit supplied to children, 1.4 billion won to improve conditions for corporate taxi drivers and 2.7 billion won for child care, including better pay for child care teachers.
While the immediate threat to welfare programs has been averted, the outlook for next year is bleaker. "With revenue falling and fiscal burdens growing, we had to protect livelihood programs that were at risk of being halted," Gyeonggi Province Governor Choo Mi-ae said at the session, calling the budget "an agreement reached by the administration and the council working together for residents." She added: "We have put out the immediate fire, but the problem is next year. With no available funds, fiscal conditions are expected to be very serious."
The province and the council agreed to pursue changes to the local tax system as a fundamental remedy. At the same session, the council adopted a resolution urging a local tax overhaul to overcome the province's fiscal crisis and establish a stable revenue structure. The resolution argues that the current structure must change because heavy reliance on acquisition taxes leaves revenue vulnerable to economic swings, while essential spending needs such as welfare keep rising.
The resolution calls for raising the local consumption tax rate in stages from the current 25.3% to 40.3% and transferring 5% of the national corporate tax to metropolitan-level local governments. It also proposes converting the local education tax on tobacco consumption into a regional resource facility tax for fire services. The council plans to send the resolution to the presidential secretariat, the prime minister's office, the Ministry of the Interior and Safety and other relevant agencies, and to press for the tax overhaul alongside the provincial administration.