Jerusalem Mayor Nir Barkat today sent a letter to the Prime Minister and Minister of Finance severely condemning what he called the "unfortunate" letter by dozens of local authorities heads to the Minister of Finance reported yesterday in "Globes" opposing the Ministry of Finance's plan to institute a differential budget for the local authorities.
The Ministry of Finance plans to substantially decrease the state's share in budgeting for the population growth expected in the coming years in the large cities, especially for education and welfare. Most of these cities have signed roof agreements with the state in which the state undertook to pay for a large part of the infrastructure and development costs in new construction sites in exchange for rapid processing of construction plans at the local planning and building commissions. In a letter sent yesterday to Minister of Finance Moshe Kahlon by 29 heads of local authorities, all of whom head well-off local authorities that stand to lose money under a differential budgeting system, they threatened that they would reconsider their undertaking to the state in the roof agreements.
The letter aroused anger among the heads of poorer local authorities that stand to benefit from differential budgeting, including the mayor of Jerusalem. "It appears that the leaders of the rich local authorities have decided to deny any responsibility for their brothers in outlying areas and children not fortunate enough to be born in central Israel, who for years have suffered from a lack of infrastructure, inadequate budgets, and inferior status," Barkat wrote.
Barkat added, "The heads of the rich local authorities have apparently lost their moral compass and principle of mutual responsibility, and in their belligerence and desire to continue swelling their coffers have even threatened to use all of Israeli society as a hostage by threatening to strangle the government's efforts to create a supply of affordable housing, which is as necessary to all of us as the air we breathe. This is the time to correct many years of social injustice and make a historic change in the way public resources are distributed."
400,000 housing units in various planning stages are being pushed forward in the major cities, many in the framework of these roof agreements, indicating the power of the whip wielded by the heads of the well-off local authorities.
At the moment, it does not appear that the Ministry of Finance intends to withdraw its plan. In response to the letter from the local authority leaders, the Ministry of Finance said, "The current budgeting method, in which all local authorities are budgeted equally, without taking into account that some of them are less well off, has the effect of widening educational and welfare gaps in the poorer local authorities. The Ministry of Finance plans to solve this by giving priority to the poorer local authorities. We regard this letter as astonishing, given that a joint team that includes the chairman of the Federation of Local Authorities in Israel and the Ministry of Finance budget department head has agreed to go ahead with a suitable mechanism."
Published by Globes [online], Israel business news - www.globes-online.com - on September 3, 2015
© Copyright of Globes Publisher Itonut (1983) Ltd. 2015