A proposal to maintain the current national tax linkage rate of 20.79% for local education finance grants while sharing the financial impact of sudden tax revenue fluctuations between the government and the education sector has been put forward. If adopted, this plan would ensure that local education offices secure grants totaling 89.6 trillion won, exceeding the minimum required amount of 88.4 trillion won for 2027. Additionally, it would allow the government to prepare a total of 44.5 trillion won in future response resources over the next four years, from 2027 to 2030.
The Korean Association of Education Superintendents (KAES) held an emergency press conference on November 4 at 9:20 a.m. in the National Assembly's communication hall, officially proposing a legal alternative to harmonize educational financial stability with national future investments in response to the government's unilateral move to abolish the tax linkage system. Six superintendents, including KAES President Jeong Geun-sik, Gyeongnam Superintendent Kwon Soon-ki, Chungbuk Superintendent Yoon Geon-young, Gyeongbuk Superintendent Lim Jong-sik, Daegu Superintendent Kang Eun-hee, and Ulsan Superintendent Jo Yong-sik, attended the conference to voice their concerns.
"When revenue increases, we share; when it decreases, we take responsibility"
The core principle of the proposed plan is to share the benefits during times of revenue growth and to take responsibility during downturns. The government's plan seeks to completely abolish the long-standing tax linkage system and replace it with a formula that calculates grants based on the previous year's amount multiplied by the economic growth rate and the school-age population change rate (with a reflection rate of 35%). Under this plan, the 2027 grant would amount to only 78.9 trillion won, falling short by 9.5 trillion won of the minimum required amount. The projected reduction in grants over the four years from 2027 to 2030 is estimated to be between 113 trillion and 115 trillion won, according to the National Assembly Budget Office. Furthermore, within the same government proposal, the general local grants managed by the Ministry of the Interior and Safety would maintain the linkage system, raising concerns about fairness.
In contrast, the KAES plan retains the legal tax linkage rate of 20.79%. It introduces a new "±5% buffer mechanism" that stipulates that if tax revenue exceeds the previous year by more than 5%, two-thirds of the excess will be allocated to future response resources, while one-third of the decrease in education office revenue will be compensated by the government when tax revenue drops by more than 5%.
As a result, in the event of a significant revenue increase in 2027, the calculated amount based on the tax linkage (109.8 trillion won) would include the 5% increase (79.5 trillion won) plus one-third of the excess (10.1 trillion won), totaling 89.6 trillion won for education offices. In contrast to the government's plan, which would unilaterally cut and convert 32.5 trillion won in the first year and would not reinvest increased revenue into education, the KAES plan aims to share the shock of revenue surges while preserving the long-term growth foundation of educational finance.
Press Briefing Addresses Concerns Over Tax Linkage Compromise
Following the press conference, a briefing addressed concerns regarding the feasibility of the proposed plan and the potential compromises made by the education sector. In response to criticisms that the education sector had made concessions contrary to civil society's demands to preserve the tax linkage, the superintendents firmly stated that the tax linkage rate of 20.79% and the calculation criteria would remain unchanged. They clarified that the sharing would only apply to revenue increases exceeding 5%, while the government would cover one-third of the revenue decrease, thus establishing a financial safety net.
When questioned about the minimum required amount of 88.4 trillion won, the KAES rebutted claims that it was an arbitrary estimate by citing the financial realities faced by schools. They noted that the budgetary needs for 2027 (103.9 trillion won) reflect only the increase in civil servant salaries (2.5 trillion won) compared to the final budget for 2026 (101.6 trillion won). If the government's plan were implemented, 7.4 trillion won would be unallocated in the budgets of the 16 metropolitan and provincial education offices, with some regions unable to cover even part of their personnel costs. Additionally, fulfilling legal obligations for securing the required number of teachers and providing necessary resources would require an additional 9.5 trillion won in grants, making the proposed 88.4 trillion won a minimum legal requirement rather than a new initiative.
Regarding the shift from proposing a "formula revision" to prioritizing the "coexistence plan," the KAES clarified that their primary proposal is to maintain the tax linkage system. They prepared the formula revision as a secondary option to prevent severe financial deficits if the National Assembly only considers the government's formula. The formula revision would address the shortfall for 2027 but would not resolve the structural issue of increased revenue not being reflected in educational finance. In contrast, the coexistence plan would provide 10.2 trillion won more in grants by 2030 compared to the formula revision, ensuring stability even during periods of declining school-age populations while securing 44.5 trillion won in future resources.
Concerns Over Unsettled 11.7 Trillion Won in Grants
The superintendents also strongly criticized the government's attempt to abolish grant settlements. According to current law, 11.7 trillion won in grants for 2026 should be allocated to education offices based on excess tax revenue, but the government plans to leave this amount unsettled and absorb it into government funds within the year. Furthermore, retroactively abolishing settlements for the completed 2025 fiscal year is seen as a serious violation of constitutional principles.
In light of these developments, the KAES plans to launch a major public campaign and legislative advocacy following the announcement of the coexistence plan. Prior to the press conference, the superintendents met with key legislative leaders, including the chairpersons of the Legal Affairs and Budget Committees, to explain the rationale behind the coexistence plan. They will begin a promotional campaign to raise awareness of the risks of budget cuts among educators, parents, and the public, starting with an additional discussion scheduled for November 9 in the National Assembly. Additionally, they are closely examining legal responses, including constitutional challenges regarding the government's proposal's violation of funding principles and legal standards.
Gyeongbuk Superintendent Lim Jong-sik and Daegu Superintendent Kang Eun-hee emphasized that over 400 education and civic organizations are demanding the preservation of the 20.79% tax linkage without compromise, while the government insists on expanding funds. They stated, "In this standoff, the KAES must act as a responsible mediator that protects students' learning while supporting the nation's future strategy." They urged that the education grant reform should not be processed as a subsidiary law of the government budget without thorough examination by the Education Committee.
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.