Localities disburse money they don't have ahead of elections

People are holding a press conference asking the Seodaemun District Office to dole out relief funds to 3,000 residents in front of the office on March 30. [NEWS1]

Geumcheon District Office and Sangju City Hall are disbursing relief funds despite their lack of fiscal wherewithal.

The Geumcheon District in southern Seoul started taking applications from residents on Monday for funding.

All registered residents of Geumcheon District as of Feb. 25 this year are eligible to apply regardless of their income status and property asset value.

The district plans to allot 12 billion won ($9.9 million) for the grants despite only having an annual budget of 622.6 billion won.

Relief disbursements will equal 2 percent of the district's total budget, about equal to what it spends on road maintenance.

The district provides 15.1 percent of its own funding, below the 30.2 percent average for the 25 districts in Seoul.

As many municipal governments are providing relief grants ahead of local elections on June 1, they have been criticized for providing the money to buy votes rather than helping to revive the economy.

The disaster relief plan overlaps with president-elect Yoon Suk-yeol's pledge for 50 billion won of compensation for small merchant.

Sangju City in North Gyeongsang has been providing 30 billion won of funding since last month, with each city resident receiving 200,000 won and each small merchant and religious facility receiving 1 million won.

The city only covers about 10 percent of its budget with funds raised locally.

Metropolitan governments are also proposing similar plans ahead of the local elections. Ten regions within Gyeonggi will provide funding. Among them, Guri will provide 60,000 won to all residents.

According to a Korea Development Institute report on the effectiveness of the first disaster relief fund policy, sales at supermarkets and convenience stores increased more than those of restaurants and service companies, which were heavily influenced by the pandemic.

Politicians have proposed bills to limit cash subsidies ahead of elections.

This includes an amendment to the Public Official Election Act proposed by PPP lawmaker Cho Hae-jin in February last year.

The amendment was proposed to prohibit any kind of cash support within 90 days or less of election.

Experts warn that providing disaster relief could be seen as an attempt to earn votes regardless of the effect.

"It is ideal to reduce unnecessary expenditures as chiefs of municipal governments may change after the local elections in June," said Yook Dong-il, honorary professor of Chungnam National University.

BY KIM MIN-WOOK [kjdnational@joongang.co.kr]