Education Ministry draws a line, saying no official discussions are underway on revamping the local education subsidy formula, even as a semiconductor boom pushes this year's education grants toward 81 trillion won (about $53.3 billion)

The Education Ministry drew a line Monday, saying "there are no officially ongoing matters" regarding a proposed overhaul of the local education finance subsidy formula. [123RF]
The Education Ministry drew a line Monday, saying "there are no officially ongoing matters" regarding a proposed overhaul of the local education finance subsidy formula. [123RF]

By Kim Yong-jae, The Herald Business

The Ministry of Education drew a line Monday, saying there are "no officially ongoing matters" regarding a proposed overhaul of the local education finance subsidy formula.

Education Ministry spokesperson Jeong Byeong-ik made the remark at a regular briefing held Monday morning at the Sejong Government Complex, in response to a question about how far discussions on reforming the education subsidy formula had progressed.

However, the Ministry of Planning and Budget and the Education Ministry are conducting behind-the-scenes discussions on amending the Local Education Finance Subsidy Act to restructure how education subsidy funds are allocated.

The local education finance subsidy is money the central government transfers to each provincial and metropolitan office of education. It draws from 20.79 percent of domestic tax revenue and a portion of the education tax collected among national taxes. Introduced when educational conditions were poor, the subsidy was designed not as a standard budget appropriation — where the required funding level is estimated and set — but as a mechanism automatically linked to domestic tax receipts.

As the school-age population has declined, controversy over "lax management" of the subsidy has grown alongside the fund's size. Over the past decade, the total has risen by nearly 33 trillion won, from 43 trillion won in 2016 to 76 trillion won under this year's supplementary budget. A semiconductor boom is now expected to push the figure to 81 trillion won this year.

Adding to concerns about wasteful spending, superintendent candidates in the June 3 local elections flooded voters with cash-based campaign pledges — including subsidies for driver's license fees, full coverage of public transportation costs, a basic education allowance and cultural arts vouchers for students.

Earlier, Minister of Planning and Budget Park Hong-keun said at an open forum on expenditure restructuring held June 8 that "we cannot ignore factors such as the school-age population," adding that "we must overcome the rigidity created by the subsidy's automatic-linkage structure."

The Education Ministry, however, favors keeping both the automatic-linkage mechanism and the current domestic tax allocation rate of 20.79 percent unchanged. The ministry held discussions on the education subsidy Monday with newly elected education superintendents from the June 3 local elections.


brunch@heraldcorp.com