Municipal budget cut to make Tel Aviv costlier

Tel Aviv mayor Ron Huldai
Tel Aviv mayor Ron Huldai

Price hikes can be expected for leisure, cultural and child care services as well as municipal parking fees as the city shaves NIS 500 million of its annual budget.

Tel Aviv Municipality is currently preparing its biggest budget cut in recent years amounting to NIS 500 million, a source close to the matter has told "Globes." The cuts will include price hikes in services to the public such as cultural and children's extra-curricular activities and afternoon child care centers as well as higher municipal car park fees and the cancellation of cultural events. Most of the price hikes will be temporary measures.

The cut is being implemented because of increased spending following the war, rising prices, and two court rulings last year on improvement levies. The rulings stopped the municipality's practice of collecting the levies on the sale of apartments in buildings that had undergone urban renewal. The municipality claimed the ruling dealt a lethal blow to the municipal budget.

In addition, the property tax fund initiated by the government last year to divert part of property tax revenues from local authorities to encourage housing construction, is also harming the municipality's revenues. Tel Aviv is also preparing for the government to impose various decrees on local authorities, as a result of the economic crisis.

15%-40% rise in leisure service prices

The expected cuts in Tel Aviv will include streamlining in all municipal units, with municipal employees having overtime restricted. Public services will also undergo dramatic changes: prices in the leisure sector, such as classes, community centers and country clubs, will rise by 15-40%. After-school prices will also rise.

Prices in the leisure sector in Tel Aviv have actually not risen since 2019, and in 2021 they even fell significantly with the launch of a municipal program to ease residents' cost of living burden. Prices are now expected to return to the pre-initiative level. Discounts for the south of the city and Yafo will be unaffected.

Planned infrastructure projects planned will be partially frozen, but planning procedures will continue. Cultural events in the city will be canceled, also because of the atmosphere due to the war, including White Nights, the Tel Aviv Marathon, Opera in the Park, Independence Day events and Gay Pride events. Municipal parking lots will also become more expensive, due both to existing economic needs and to policy considerations that the municipality promotes, including reducing dependence on cars and creating incentives for use of transport alternatives. The Tel Aviv-Yafo Municipality Council will meet on May 20 to vote on the new budget in light of the NIS 500 million shortfall.

Despite the cuts, the municipality's budget is expected to grow as a result of demographics and increasing fixed expenses, such as wages. In 2023 the budget was NIS 10.3 billion.

Tel Aviv Municipality said, "In view of the economic situation in the and as a direct result of the consequences of the Swords of Iron War, which led to price increases and an erosion of the municipality's revenues, alongside other consequences that may apply to the municipal budget such as rulings on betterment levies, the Tel Aviv-Yafo Municipality is preparing for a budget cut in all units The reduction is taking responsible preventive measures so as not to lead to a deficit or financial complications, with, among other things, budget cuts and tariff updates planned in various areas."

Published by Globes, Israel business news - - on May 9, 2024.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2024.

Tel Aviv mayor Ron Huldai
Tel Aviv mayor Ron Huldai
Twitter Facebook Linkedin RSS Newsletters גלובס Israel Business Conference 2018