The Federation of Local Authorities in Israel, Forum 15 - The Israeli Forum of Self-Government Cities, and many local authorities declared a strike yesterday in protest against the fact that the government is continuing the process of legislating its arnona (municipal taxes) law. The law, which is designed to "re-order" the distribution of arnona money, and in practice to transfer money from municipalities with a wealth of high-yield, low-expense commercial and industrial areas to a special fund, has aroused ire of many local authority heads, and they have begun a strike.
The session on the issue in the Knesset Finance Committee yesterday, like previous sessions, was not peaceful, and almost spilled over into violence as several of those present were evicted. So who is striking and who isn’t, which services will not be provided in the striking cities, and where are schools functioning?
The protest is being led by The Federation of Local Authorities in Israel and Forum 15 - The Israeli Forum of Self-Government Cities (an organization that brings together those cities that are independent in that they do not receive government grants), but each local authority can decide for itself whether or not to join the strike.
The list of cities that are striking is long. It includes Tel Aviv-Yafo, Ramat Gan, Givatayim, Petah Tikva, Kiryat Ono, Rosh Ha’ayin, Ramat Hasharon, Hod Hasharon, Herzliya, Kfar Sava, Ra’anana, Rishon LeZion, Modi’in, Ramla, Ashdod, Beersheva, Haifa, Yokne’am, Tiberias, the Jezreel Valley Regional Council, the Gilboa Regional Council, and the South Sharon Regional Council.
Which cities are not on strike?
The main city not striking is Jerusalem. Be’er Yaakov, Harish, Akko, Ashkelon, and the Gaza Border Regional Council are also not participating in the strike.
Which services are not being provided?
Among other things, garbage will not be collected, there will be no sanitation work, local planning and building committees will not work, and municipal offices are closed.
What about schools?
The current decision of The Federation of Local Authorities is that there will be no strike in the education system from today.
How long will the strike last?
The duration of the strike is not clear at present. The protesters threaten that the measures will continue until the government retracts the arnona law.
What are the municipalities and local authorities so angry about?
As mentioned, the arnona fund will oblige local authorities to transfer funds to it annually in accordance with their revenue from non-residential arnona. The anger is therefore naturally on the part of heads of local authorities with large areas of commercial and industrial properties, or those to which such areas will be added in the next few years, as they will have to pay more into the fund. They argue that the state is putting its hand into their pockets, and in effect weakening local government versus central government.
What stage has the legislation reached?</b
Last Thursday, it looked as though agreement had been reached with the Ministry of Finance by The Federation of Local Authorities and Forum 15, and sources familiar with the matter say that an agreed draft was drawn up, so that the law seemed destined for a smooth passage.
On Sunday, however, there was a reversal, and the local government representatives apparently withdrew from the understandings said to have been reached. As far as the government is concerned, the legislation will proceed even without agreement. Yesterday evening, the Knesset Finance Committee approved the consolidation of sections of the bill that had been split, on the way to approval of the bill for second and third readings in the Knesset plenum.
Minister of Finance Bezalel Smotrich says that the bill is designed to help curb the rise in the cost of living by creating greater supply of housing and thus bringing down housing prices. "Today, a local authority head has an incentive to build for business and not housing, which creates low supply alongside growing demand. The result is constantly rising housing prices, and we all pay the price.
"The fund for reducing the cost of housing seeks to do one simple thing: to give local government heads an incentive to build housing units. More supply equals falling prices. All the rest of the things they tell you are complete lies. The days are over in which we surrender to vested interests. Ten local government heads have declared war on reducing the cost of living. They claim that the strong local authorities will finance the weak ones. That’s not true. Anyone who builds housing units will receive a grant from the fund; anyone who builds offices will pay a small amount into the fund in relation to the huge gains he makes and will continue to make, from business arnona," Smotrich said.
Published by Globes, Israel business news - en.globes.co.il - on May 16, 2023.
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