Busan education office opposes reform of local education subsidy formula

The Busan Metropolitan Office of Education has come out against the government's proposed overhaul of the local education subsidy system, calling for the current formula — which ties grants to a fixed share of domestic tax revenue — to be preserved in order to ensure stable education funding.

The office said Wednesday that Busan Superintendent of Education Kim Seok-jun attended an emergency press conference of the National Association of Superintendents of Education at the National Assembly on Tuesday, joining fellow superintendents from other cities and provinces in urging the government to withdraw the reform plan.

The overhaul, which the government unveiled Friday, would scrap the existing formula under which local education grants are calculated as 20.79 percent of domestic tax revenue plus a portion of the national education tax. In its place, the government proposes sizing grants based on the nominal economic growth rate and changes in the school-age population.

The Busan office maintains that education funding needs must continue to grow even as student enrollment falls. It argues that a decline in student numbers does not automatically translate into a smaller teaching and administrative workforce, and that essential costs — including personnel, school operating expenses and facility maintenance — are indispensable for stable school management.

An official at the office said Busan has a high proportion of aging schools, particularly in older urban neighborhoods, making investment in facility upgrades an urgent financial priority. The official cited the office's medium-term local education finance plan, which projects that rebuilding deteriorating schools and improving facility conditions will require 3.1 trillion won ($2.24 billion) over the next five years, as grounds for opposing the reform.

The office also argues that because education budgets are heavily weighted toward rigid expenditures such as personnel costs — and because essential outlays rise every year with inflation and wage increases — even holding grants flat at the prior year's level would effectively reduce the funds available for discretionary use.

Personnel costs account for 55.8 percent of the Busan office's total budget, an unusually high share. Despite falling student enrollment, this year's personnel costs have risen 703.3 billion won compared with 2021, an average annual increase of 5.1 percent, the office said. An official added that the office faces a projected 120 billion won reduction in transfer revenue, stemming from the expiration of a local tobacco consumption tax provision and the phaseout of state funding tied to free high school education.

"We cannot cut education funding simply because student numbers are declining, without adequately reflecting the real needs on the ground," Superintendent Kim said. "The government should withdraw the subsidy reform plan and engage in thorough discussion with a broad range of education stakeholders — the National Assembly, city and provincial education offices, teachers, parents and civil society."