A strike by over a dozen municipalities that began on Monday will continue until Thursday, the Federation of Local Authorities in Israel (FLA) announced in a statement on Monday evening, after numerous services were shut down during the day due to the Federation’s opposition to the government’s City Tax Fund plan.
However, municipal preschools and services related to schools will not strike, in order “not to allow parents and children to be held hostage by the Finance Minister,” the Federation stated.
The City Tax Fund, known as the “Arnona Fund,” is part of the Economic Arrangements Law, which is scheduled to pass along with the 2023-2024 National Budget by May 29.
The Fund will appropriate a percentage of the earnings of wealthier cities from their tax on commercial real estate, and reallocate the funds to every housing unit that is marketed, no matter where. By doing this, the government hopes to incentivize both wealthier and poorer cities to invest in housing instead of commercial real estate, and thus raise the supply of housing, and, eventually, lower home prices.
Opposing the fund
However, opposition MKs and the FLA strongly oppose the fund, arguing that it serves as an excuse for the government to eventually use the funds for other purposes, that it will lead to the financial collapse of some municipalities, that it is discriminatory towards Israeli Arab municipalities, and other reasons.
The municipalities that went on strike on Monday included Tel Aviv, Haifa, Ashdod, Rishon Lezion, Modi’in, Herzliya, Ramle, Ramat Gan, Givatayim, Ashdod, Kfar Saba, Ra’anana, Tiberias, Givat Shmuel, Ramat Hasharon, Holon, Beersheba, Netanya, Shoham , Or Yehuda, Kafr Kassem, Umm el-Fahm, Tira and Rahat (with the exception of schools), according to Walla News.
The services that were shut down included public preschools, Garbage collection, sanitation services, security services at elementary schools, public reception at municipal offices, parking fines in blue-and-white-marked parking spaces and more.
In its statement on Monday evening, the FLA announced a series of additional steps. These include freezing municipal planning and construction committees; freezing building permits; and freezing large-scale construction agreements.
The FLA also said it would turn to the courts to challenge the bill if it passed and refuse to pass money to the Fund.
“We will not be the tax collectors of the State of Israel’s Finance Ministry on the backs of our residents,” the FLA said.
The statement came as the Knesset Finance Committee continued to vote on thousands of revisions that the opposition filed in an attempt to stall the bill, and after of day of intense confrontations, including shouting matches between local authority leaders who attended the session and opposition MKs, and coalition MKs, chiefly among them committee chairman MK Moshe Gafni (United Torah Judaism), and even a physical removal of Yesh Atid MK Idan Rol. Rol claimed that his removal was a violation of Knesset protocol, since Knesset members may not be barred from voting. However, Gafni enabled Rol to return after the commotion died down, and the voting continued.
Addressing the issue
National Unity chairman MK Benny Gantz addressed the issue in a press conference prior to his party’s weekly meeting on Monday.
The program was a “de facto tax hike” based on “sectorial and geographical” considerations, Gantz said, explaining that all local authorities that will be forced to contribute to fund will need to compensate by either raising residential city taxes or by canceling services, which residents will then need to pay more for.
Opposition leader and Yesh Atid chairman MK Yair Lapid also addressed the issue in his comments ahead of his party’s weekly meeting.
“Theft is a strong word, but I have no other. The government is coming and seizing money of local authorities whose only sin is that they are managed well, and whose residents work and pay taxes,” Lapid said.
“The ‘Arnona [City Tax] Fund’ is not a fund, it is robbery in broad daylight,” Lapid added, arguing that this characterized the entire budget, which was a “distribution of plunder by an irresponsible government that is extorting a weak prime minister. The local authorities’ strike is unquestionably justified and we support,” he said.
Smotrich and FLA chairman and Modi’in mayor Haim Bibas reportedly reached agreements last week over the bill, but Bibas on Sunday retracted his agreement, claiming that he only agreed because his back was to the wall, as the fund was about to be approved by the committee. Smotrich, however, argued in a press conference on Sunday evening that Bibas had been pressured by special interest groups into changing his mind. Smotrich did not provide proof of this claim.