Incheon's e-eum cashback program faces suspension as city budget runs dry

Cashback payments under Incheon e-eum, the city's flagship local currency program, are set to be suspended entirely as early as mid-July after the program's budget was exhausted ahead of schedule.

The administration of Mayor Park Chan-dae, who took office as the city's ninth directly elected mayor, has officially acknowledged a serious fiscal crisis — a development expected to cause significant disruption for residents.

Park held a press conference at the city hall briefing room on Friday, saying he was "sorry to have to explain the difficult fiscal reality of Incheon before sharing an optimistic vision," and publicly disclosed the operational status of Incheon e-eum and the city's overall financial situation.

According to the city, the previous administration allocated 258.1 billion won ($66.5 million) for Incheon e-eum this year — about 100 billion won more than last year.

Budget to be fully depleted next week

The program was expanded without securing sufficient funding ahead of the June 3 local elections, and the entire budget is now expected to run out next week.

With the available budget insufficient to sustain cashback payments through year-end, all Incheon e-eum cashback disbursements — including the standard 10 percent cashback — will be suspended once the funds are exhausted.

At the press conference, Park cited findings from a transition committee's fiscal review as the cause of the crisis.

The review found that essential project costs not reflected in this year's base budget alone reached 644.1 billion won. The total additional budget burden during the current administration's term — including ongoing projects — was estimated at approximately 1.4 trillion won.

Total fiscal burden estimated at 5.5 trillion won

The city's total fiscal burden, including fund repayments, amounts to approximately 5.5 trillion won.

"The fiscal situation of Incheon that we confirmed through the transition committee's work was far more serious than expected," Park said. "We will disclose the true state of our finances, accurately diagnose the problems, and build a sustainable fiscal foundation that citizens can trust."

Rather than pursuing short-term funding measures, the city will immediately launch a fiscal and budget reform task force — comprising outside experts and city officials — to fundamentally overhaul its fiscal structure.

The task force will be led by Song Hyeon-seok, who served as vice chairman of the transition committee and oversaw its fiscal review. It will conduct a comprehensive investigation into hidden liabilities and fiscal burdens, and develop plans to reassess project feasibility, restructure the budget and strengthen fiscal soundness.

Park puts key campaign pledge — 100-day livelihood recovery project — on hold

The city will enter an emergency management posture to restore fiscal stability, and will also temporarily suspend the "100-day livelihood recovery project" — a central campaign pledge of the current administration — while conducting a comprehensive review of fiscal conditions.

"Resolving accumulated fiscal problems and restoring the foundations of sound finance is our responsibility to citizens — more so than rushing to implement campaign pledges," Park said. "We will fundamentally reform the fiscal structure through the task force and do our utmost to restore normal operations of Incheon e-eum as soon as possible."

The city plans to publicly disclose the task force's findings and the progress of fiscal reform efforts, and to build a sustainable fiscal management framework that secures both fiscal soundness and stability in residents' livelihoods.