Rep. Seo Young-gyo of the Democratic Party of Korea, who chairs the Legislation and Judiciary Committee, presides over the committee's first plenary session of the second half of the Assembly term on July 2. Seats reserved for People Power Party members are empty after the party boycotted the meeting. [Yonhap]
Rep. Seo Young-gyo of the Democratic Party of Korea, who chairs the Legislation and Judiciary Committee, presides over the committee's first plenary session of the second half of the Assembly term on July 2. Seats reserved for People Power Party members are empty after the party boycotted the meeting. [Yonhap]

Debate over reforming South Korea's local education finance subsidy system — long mired in inertia — has flared up again, driven by the presidential office and the government.

But lawmakers who hold the key to amending the relevant legislation say the road ahead remains long. The chairmanship of the Education Committee, the standing committee responsible for the issue, has been allocated to the opposition for the second half of the Assembly term, yet no appointment has been made. Sharp differences of opinion among individual lawmakers mean substantive debate is unlikely to begin anytime soon.

According to the National Assembly's bill-information system, 13 bills related to amending the Local Education Finance Subsidy Act are currently pending.

Two of the pending bills propose replacing the current formula — which ties the subsidy to domestic tax revenue — with one that reflects factors such as the school-age population, the economic growth rate and education financing needs, adjusting the statutory subsidy rate of 20.79 percent on a more rational basis. The remaining bills seek to extend a temporary increase in the share of special-purpose subsidies earmarked for AI and digital transformation, or to allow existing education subsidies to be used for daycare center budgets.

The divide within the Assembly is clear: one camp wants to adjust the subsidy ratio to reflect demographic and social change, while the other wants to broaden how the funds can be spent.

Rep. Cho Eun-hee of the People Power Party sponsored a bill on June 29 to replace the current domestic-tax-linked formula with one tied to the school-age population and the economic growth rate. "The number of students is falling, yet the subsidy automatically keeps growing — to the point where Gyeonggi Province was handing out 1 million won ($649) in cash per incoming middle school student as a populist campaign pledge," she said. To prevent a sharp drop in funding, Cho's bill includes a floor guarantee of 95 percent of the previous year's budget.

Rep. Cho Jeong-hun of the same party said the mandatory link to domestic tax revenue had run its course. "We need to look at this within the overall national fiscal framework, the way we do with the defense or welfare budgets," he said. "Frankly, now is the time to turn the entire budget upside down and take a hard look."

Rep. Kang Gyeong-suk pushed back, saying a decline in the school-age population alone was no justification for cutting the education budget. "Education needs have actually grown more diverse than in the past — demand for counseling teachers, special education teachers and the like is rising," she said. "When you factor in new demands such as AI education, the integration of childcare and preschool services, and support for higher education, cutting the budget would make it impossible to keep up."

Rep. Kim Young-ho of the Democratic Party of Korea, who chaired the Education Committee during the first half of the Assembly term, echoed that view. "Education today is far more specialized and varied than it used to be," he said. "The educational environment has changed to a degree we have never experienced before, and cutting the budget would very likely leave us unable to cope with those changes."

Still, there is some prospect of progress. The Democratic Party's floor leadership emphasized a "one-team" approach between the party, the government and the presidential office at a lawmakers' workshop on July 3, suggesting the ruling party could actively cooperate if the government moves ahead with a full-scale reform of the education subsidy system.

Obstacles remain, however. Ongoing friction between the ruling and opposition parties over the Assembly's organizational setup continues to fester, and lawmakers compete fiercely every year to secure special regional education subsidies for their own constituencies — a dynamic that observers say could hobble any serious attempt at reform.


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