Report: After-School Program Subsidies Saved, But Budget Cuts Coming

A solution has been found for the funding of after-school programs upon which hundreds of thousands of families where both parents work depend for afternoon child care – but it will come at a very heavy price, according to Kan News. The report said that the government on Sunday will approve a billion-shekel budget cut, with money slashed from nearly all government offices.

The cuts will allow for the continued subsidization of the after-school programs. Without those subsidies, the cost to parents for the programs would have jumped by hundreds of shekels. At a press conference with Finance Minister Moshe Kahlon Wednesday, Prime Minister Binyamin Netanyahu said that he had “good news for Israeli parents. The Finance Minister and I have found a solution to the funding of after-school programs. The programs will be there in September.”

Kahlon said that “although this was a challenge, we managed to find a source for the money to fund the programs. We will continue to provide for the children of Israel.”

That may be true, but according to Kan News, it is their parents – as well as Israelis who do not have children in after-school programs – who will pay the price of those subsidies. The report said that the government is spending 4% more than allocated in the state budget, and the billion-shekel cut is the first step in restoring a balanced budget.

The second step will be increasing taxes; according to Globes, that will entail eliminating tax breaks on hybrid vehicles (currently worth a 30% credit on import and purchase tax), as well as requiring full or partial payment of Value Added sales Tax for online purchases, as well as implementing taxation on digital services, a move directed at companies like Google and Facebook, which today pay almost no taxes in Israel. The report said that tax officials were still working on the plan, in the hope that they would be able to “have the smallest impact possible on as few people as possible.”

According to the report, State Attorney Avichai Mandelblit has approved the budget cuts. Mandelblit’s approval was necessary to ensure that the cuts hold up in court – because according to the Basic Law on Government, a caretaker government such as the one Netanyahu now leads is not empowered to add or subtract from the current state budget. Mandelblit said in his decision that the current budget deficit, which is “serious,” justifies the action by a caretaker government.