Deducting the Future Response Fund before the 19.24% split shrinks local grants by 30.5 trillion won

Work backwards from the 30.5 trillion won. The pool falls by 19.24% of whatever comes out of internal taxes before the split ^[4][5], so a 30.5 trillion won drop ^[6] implies a deduction of about 158.5 trillion won ^[1]. Next year's budget proposal sets the Future Response Fund at 162.3 trillion won ^[18]. That is 98% of the fund taken out of the grant base ^[2].

Read the same two figures the other way round and the grant pool absorbs 18.8% of the fund's cost ^[3], just under the 19.24% rate ^[4]. The rate stays where it is and the base it applies to gets smaller ^[5].

South Gyeongsang's own numbers scale cleanly off the national ones. The 11.08 trillion won it expects under the current formula ^[8] is 11.06% of 100.2 trillion won, and the 7.71 trillion won it expects under the new one ^[9] is 11.06% of 69.7 trillion won ^[4], so the province applied a single share, 11.4% of this year's ordinary grants ^[7], to both totals. Inside the province the split is lopsided. The 18 cities and counties take 2.84 trillion won of the 3.37 trillion won reduction ^[12][10], which is 84% of it ^[5] and averages about 158 billion won each ^[6]. The provincial government's own share falls 532.8 billion won, from 1.75 trillion won to 1.22 trillion won ^[11].

The 3.37 trillion won is a reduction in an expected increase, not a cut against this year's receipts. Under the current formula the province and its municipalities would have gone from 7.58 trillion won in this year's supplementary budget to 11.08 trillion won ^[8], a 46% rise in a single year ^[7]; under the new one they get 1.6% more ^[8]. That is a generous baseline to measure a loss against, and the province says the figures rest on the 2027 budget proposal and ministry-level budget plans announced on the 1st, with actual allocations depending on the final budget and the grant calculation process ^[13].

The joint statement issued on the 21st is titled "The Future Response Fund Must Not Encroach on Local Finances" ^[3], and the province and municipalities said they do not oppose the fund's purpose ^[14]. Their first demand is that grants due under statutory standards be calculated first, with only the remaining revenue used for the fund ^[16]. Priced nationally, that demand is worth 30.5 trillion won ^[6], money the government would then have to find elsewhere inside the 162.3 trillion won ^[18].

I would expect the second and third demands to move before the first. Raising the state funding share on government-led projects ^[16] can be negotiated project by project, while the order of calculation decides who finances roughly a fifth of everything the fund ever does ^[3]. The case against that reading is the province's own warning: if grants shrink while matching-fund burdens grow with expanded national projects, the locally tailored spending goes first ^[15], and matching obligations bite in 2027 whatever the formula says. The province said it will work with the cities and counties to get the three demands into the government's discussions on the fund and on fiscal decentralization ^[19].