Local Governments Lack Budgets for Restoration

The property damage by typhoon Rusa amounted to a record-high 4.2 trillion won as of Sep 6. But it is worried that the relief work will not proceed smoothly since the disaster relief budgets in local governments have already run out.

So, local legislatures are considering mobilizing every disposable financial resources and issuing local bonds. But some local governments including Gangwon Province, which was hit hardest, is pinning hope on the aid from the central government, complaining the difficulties in raising fund on their own.

According to related regulations and guidelines, the central government should provide economic assistance for the restoration of national infrastructures such as dams, railroads and national roads. But the central government and local governments should other infrastructures under the control of local governments should bear the burden half and half for the restoration of other infrastructures under the control of local governments such as local roads and local streams.

According to regulations, metropolitan and basic self-governing bodies should burden 25% of local expenditure respectively, but if the share of cities and guns in local expenditure exceeds 1.75 billion won, the national treasury should provide 80% of the excess amount.

In Gangwon Province, the damage wreaked by Rusa has already surpasses 1.6 trillion won, and is expected to reach 2 trillion won. But the reserve disaster fund earmarked for the province this year is only 11.1 billion won.

The province already spent about 8.2 billion won for emergency relief and has only 2.9 billion won in remainder.

Gangwon Province found it impossible to raise fund at the province level and decided with other hard-hit city governments to urge the government to provide large-scale assistance.

Gyeongnam Province, whose damage amounted to 750 billion won, secured 43.4 billion won in reserve disaster fund this year. But the province spent 8.7 billion won for flood relief work early August, and have 34.7 billion won in remainder.

As the province predicts that the total amount of money needed for restoration work would reach 2 trillion won, it plans to mobilize every possible disposable financial resource. But if it is not sufficient enough, the province will issue local bonds.

A local government official said, "The total reserve fund this year was a mere 1.4 billion won. The money was used for restoration work after the province was hit by previous torrential rain. This time, 15 billion won of 150 billion won needed for restoration work should come from military expense. But even if the local government borrows 15 billion won, it has no way to pay the money back."

Jeonnam Province, whose damage amounted to 376.9 billion won, estimates that about 740 billion won would be needed to restore.

The province will have to burden 150 billion won, but it secured only 17.8 billion won in reserve fund.

Also the additional burden on the province is expected to reach 28 billion won in restoring the province from havoc wreaked by typhoon Ramasun and previous torrential rain.

An official in the provincial government said, "The province has been put under unimaginable financial pressure due to exorbitant expenditure for restoration. Maybe the province has to issue local bonds. It will take long time to restore the entire province since the local government has to provide aid in accordance with the scale of damage wreaked."

Meanwhile, the Ministry of Planning and Budget said, "The local governments, which have ran out of budget, should work out measures to raise fund by themselves because the principle stating the proportion of national treasury and local expenditure for restoration work should not be violated."