This study aims to identify the critical issues on local education finance confronting both central government and local education authorities in Korea, and to put forward practical policy ideas to tackle them. In doing so, this study primarily employs documentary research method, using government reports, official statistics, and research reports etc. Taking into account that the financial resources for education and other policy areas have been not sufficient in recent times, in particular, policy directions for resource allocation need to be re-designed both now and in the future. The paper concludes that in order to address financial problems associated with educational function, some practical and effective measures should be taken as soon as possible. One of them is that free meals provision system for school children, based on election pledges, needs to be re-examined from zero-based point of view. Another thing to be noted is that current local education governance being operated in Korea is a system which is completely different from those of other advanced countries in that the administrative structure for education is separated from that for other local government functions, such as welfare, environment, and waste disposal, resulting in inefficiency of resource utilization. In this respect, the local education governance needs to be re-structured.