Costly populism threatens local finances

With 44 days until the June 3 local elections, candidates are rolling out a series of high-cost pledges that could weigh heavily on municipal finances. At least seven local governments have proposed building dome stadiums, each expected to require hundreds of billions of won in construction costs. Suspension bridges, a familiar campaign pledge because they are highly visible and relatively quick to build, have also surged in number. More than 100 have been added nationwide over the past five years. Concerns are growing that more taxpayer-funded projects could turn into long-term financial burdens, as most local cultural, sports and tourism facilities already operate at a loss.

Incumbents seeking reelection, including North Chungcheong Gov. Kim Young-hwan, South Chungcheong Gov. Kim Tae-heum, Cheongju Mayor Lee Beom-seok, Gwangmyeong Mayor Park Seung-won and Guri Mayor Baek Kyung-hyun, have pledged to build dome stadiums. Similar proposals have emerged from preliminary candidates in North Jeolla Province and Seoul. However, few have offered clear plans for funding construction or covering ongoing operating costs.

These pledges risk repeating the experience of suspension bridge projects. Built to attract tourists, such bridges have increased from 110 nationwide in 2010 to 259 last year, often costing tens of billions of won. That amounts to more than one bridge per municipality on average among the country’s 226 local governments. With few such structures in major cities like Seoul, the concentration in rural areas is even higher.

As similar projects have multiplied, their appeal as landmarks has faded. Many generate little revenue while requiring annual maintenance costs that can reach tens of billions of won. Despite this, new plans are being pursued in Damyang, Yangpyeong and Seoul’s Jungnang District.

Contrary to the optimistic projections often presented during campaigns, only about one in 10 public facilities nationwide turns a profit, including major venues such as Seoul World Cup Stadium. According to the Ministry of the Interior and Safety, 87 percent of 532 public facilities surveyed were operating at a loss. Among large cultural and arts facilities run by metropolitan governments, two reported annual deficits of around 40 billion won. Total losses from public facilities of a certain scale across metropolitan and local governments approach 1 trillion won each year.

If elected, candidates who promise large-scale projects without rigorous feasibility studies may press ahead to deliver visible results tied to reelection. Such projects risk becoming a lasting burden on local finances. Voters, analysts say, should look beyond the immediate appeal of high-profile pledges and weigh their uncertain benefits against the long-term costs.