The Governors Association of Korea, which brings together the heads of the country's 17 metropolitan and provincial governments, urged the central government to keep the current formula for calculating local shared tax grants, warning that a planned new fund would cut the transfers. The association also called for a bigger share of national funding for fire services, saying local governments still shoulder most firefighting costs even after firefighters were converted to national civil servants, following the recent death of a firefighter in a blaze in Bucheon, Gyeonggi Province.
Park Chan-dae, chairman of the association, held a press briefing at the Press Center in Seoul's Jung District on the 19th and released a joint petition on the introduction of the future response fund. The document calls for maintaining the existing method of calculating local shared tax grants and for restarting a government-wide fiscal decentralization task force to raise the local grant rate and the share of local taxes.
The concerns stem from the government's plan to change the calculation method as it creates the future response fund next year. The government intends to use additional tax revenue from a semiconductor upturn and other gains to establish the 162.3 trillion won fund in 2027. Because the fund's resources would be excluded from the internal taxes used as the basis for calculating local shared tax grants, the transfers are estimated to fall by about 30.5 trillion won compared with the existing formula.
Park said he shares the purpose behind the new fund but added that "local finances were strained by roughly 100 trillion won in revenue shortfalls under the Yoon Suk-yeol administration, so growing internal tax revenue should be used to shore up insufficient finances." He said local governments "are still wringing out a dry towel to maintain spending." Participants also said that if keeping the current formula proves difficult, the government should prepare measures to make up for the reduced grants and consult fully with local governments.
More fundamentally, the association called for reopening discussions on substantive ways to expand local finances, including raising the state funding share for national projects and increasing the proportion of local taxes, in the interest of local fiscal autonomy and balanced national development. "Many functions have been transferred to local governments, but finances have not followed," Park said. "Local fiscal autonomy and balanced national development require change on a larger scale."
Prompted by the Bucheon fire, the association also pressed for more state funding for fire services. Firefighters were converted to national civil servants in 2020, but of the 6.3632 trillion won in total personnel costs in 2025, the fire safety grant tax, which is state-funded in nature, accounted for only 547.6 billion won, or 8.6%. "Rising personnel costs are cutting into budgets for essential projects such as replacing aging fire trucks and upgrading rescue equipment," Park said, adding that the association will work with the government and the National Assembly to expand state funding.