A woman begs in Jerusalem.
(photo credit: MARC ISRAEL SELLEM/THE JERUSALEM POST)
Poor municipalities receive less funding for welfare services than richer localities due to the state’s budget matching system.
As part of the system, social service departments in local authorities provide services financed through matched funding. For every shekel spent by the local authority, the Labor and Social Services Ministry provides an additional NIS 3, so that 75% of the local welfare budget is financed by the national government and 25% by the local authority.
The High Court of Justice is reviewing a petition that seeks to strike down this method of financing, on the grounds that it is not equitable.
A discussion in the Knesset State Control Committee on Monday addressed the inequality and the “unanimous understanding” among MKs, academics, and municipal authorities of the need to implement a new budgeting method.
MK Shelly Yacimovich, chairwoman of the committee, said, “Everyone agrees that matching is a distorted mechanism with a clear result: The powerful and rich authorities become stronger and richer, while the weaker and poorer authorities become weaker and poorer.”
The Taub Center for Social Policy Studies in Israel published a report earlier this month which revealed that the richest municipal authorities spend an average of NIS 9,095 per client annually, while for Israeli-Arab authorities, which are among the poorest, the figure is NIS 3,387.
This discrepancy, the study found, was that the matching funds from the ministry create a gap that increases the disadvantage of poorer localities; among them the average per-client expenditure is NIS 3,170 a year, compared to NIS 5,400 for the remaining authorities.
Mayors of poor municipalities are often forced to forfeit welfare services due to the matching system, while stronger municipalities receive increased funding to provide their residents with better welfare services.
Na’im Shibli, mayor of Shibli- Umm al-Ghanam, an Arab town at the foot of Mount Tabor in the Lower Galilee, said that the locality was forced to seek donations to pay its 25% to run a day center for seniors.
Mayors from richer municipalities, however, say that they are forced to pay much more than 25% of the funds to provide their citizens with welfare services, and that they too need additional funding from the state.
Labor and Social Services Minister Haim Katz announced at the Knesset discussion that he was considering a gradual reduction in poorer authorities’ participation rate in welfare budgets, within the framework of the 2019 state budget.
Despite this, Katz explained that abolishing the matching system entirely would cost NIS 2 billion – money that would be deducted from important welfare services.
“I have to decide – [between getting rid of local] matching [funds], and [providing services for things such as] autism,” he said.
“The population increases by 2.9% every year, life expectancy goes up, so we need to allocate more to the elderly.
I don’t know where to find money for everything,” he said.