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Lee Jae-myung, the president of South Korea, speaks during a policy briefing for mayors, county chiefs and district heads at the State Guest House of Cheong Wa Dae on Nov. 12. / Source: Yonhap News

President Lee Jae-myung announced on Nov. 12 that the government will triple next year’s budget for the regional autonomy account under the Local Support Fund, raising it to 10.6 trillion won. He said the expanded funding would serve as “seed money for regional development.”

Attending the Central-Local Cooperation Meeting at the presidential office in Yongsan, Lee said the government had sharply increased comprehensive grants to ensure stronger support for areas farther from the Seoul metropolitan region, reflecting its “local-first, local-priority” principle in the 2025 budget proposal. Since its launch in January 2022, the meeting has convened once each quarter, but this was the first held under the Lee administration.

The president also reaffirmed plans to transfer more state duties to local governments, expand fiscal decentralization and move public institutions to regions outside the capital area.

“To break the capital-centric structure and ensure that all regions enjoy equal opportunities for development, the central and local governments must act as strong and equal partners,” Lee said. He urged local administrations to use their expanded authority responsibly to deliver tangible improvements to people’s daily lives.

Topics discussed at the meeting included raising the local consumption tax rate, expanding local tax bases, gradually increasing the legal share of local allocation taxes, strengthening the Local Finance Management Committee, creating a pan-government task force on fiscal decentralization, improving pre-consultation procedures for local fiscal burdens, increasing autonomy in state-subsidized projects, and building a permanent operating system for the Local Finance Management Committee.

Addressing concerns over a potential tax hike, Lee clarified that increasing the local consumption tax does not impose additional taxes on residents. “It simply means increasing the share of value-added tax revenue allocated to local governments,” he said.

Participants also discussed a proposal to rename the “Central-Local Cooperation Meeting” as the “National Autonomy and Balanced Growth Council,” with aims to elevate it to a policy decision-making body equivalent to the Cabinet. The presidential office said further consultations are needed due to differing views on the name change.