The Korea Local Administration Review

The purpose of the article is to find ways for the improvement of localeducation financing system. The current local education financing systemexperiences low independent status, heavily depending upon the grants(fiscaltransfers) from the central government. Under the situation, it is very difficultfor local education authorities to respond to the rapidly increasing fiscal needsof local education. The worst problem is the two major equalization grantsystems(Local Shared Tax and Local Shared Tax for Education) for localfinance operated by the different line ministry of the central government arenot systematically linked together. In addition, horizontal relations between localgovernments and local educational authorities are not cooperatively operated.Recognizing these facts, this article analysed major problems and features oflocal education finance through the basic statistical analysis. Based on theresults, this study proposed short-term and long-term policy proposals for theimprovement of local education financing system. As the short and mediumterm policy proposal, this study proposed the following measures: (1) allowingpartial taxing powers to local education authorities, (2) strengthening thelinkage between the Local Shared Tax and the Local Shared Tax for Education,(3) strengthening the linkage between local government and local educationauthority in the areas of related policy and fund(budget) utilization.