Dozens of mayors of cities and heads of local authorities announced Wednesday that their towns would go on strike on August 31st – one day before the start of the academic year. At a press conference in Tel Aviv, the head of the Local Authorities umbrella group, Chaim Bivas, said that all city services would be halted beginning that day – including education, trash collection, parking enforcement – unless the government “changed its ways” and rewrote some key tenets of the Arrangements Law.
Specifically, the mayors are upset at a new rule that will pool local real estate taxes (arnona) and distribute the money based on need, population, etc., instead of having them paid directly to cities. As a result, many cities will have a budget shortfall, said Bivas, making them dependent on the good graces of the government. “They keep raising the arnona rates, but we don’t get a shekel of it,” said Bivas.
Another important factor in the dispute between the cities and the government is the perceived damage of new edicts issued by Finance Minister Moshe Kachlon against the Lottery Authority. Kachlon announced this week that he was banning 550 gaming machines used by the Lottery, and that winnings as small as NIS 5,000 would be taxed at a rate of 35 percent – the intention being to discourage Israelis from playing the lottery, which Kachlon sees as a regressive tax on the poor.
That’s fine for Kachlon, said Bivas, but the municipalities rely on the Lottery money for education – so the less proceeds from the lottery, the fewer education resources will be available to cities. “As far as I’m concerned now, they can shut the Lottery down altogether,” said Bivas. If Kachlon doesn’t want to fund education from the Lottery, said Bivas, then he could find another source.
“The government has a secret ‘slush fund,’ called the Israel Lands Administration, which collects billions of shekels a year,” said Bivas. “Can they not find NIS 900 million for classrooms to make up for the Lottery money?”
According to Bivas, the Arrangements Law, which covers expenses not covered by the state budget, is a “disaster” for local authorities, cutting their income by NIS 2 billion. “These funds are for basic expenses, and cutting them will harm all citizens of Israel,” he added.