The Union of Local Authorities is demanding that the Finance Ministry fund a pay increase for its workers, citing an agreement signed last month between the ministry and the Histadrut Labor Federation. The deal stipulated a 5 percent raise for all government workers by 2010. Negotiations began in July 2007 and the final agreement was signed in May. Although the Union of Local Authorities participated in the negotiations, it chose not to sign the documents and its member localities are exempted from funding the raise, union spokesman Motti Dannos said Thursday. The local authorities, which include the regional and local councils, employ approximately 100,000 people. Their employees are supposed to be paid higher salaries starting Friday, at an additional cost of NIS 400 million for 2008. But that is not likely to happen. "No one talked to us about what would happen, about who is paying the salary raise for these workers," Dannos said. "The local authorities have no way to pay NIS 400 million." From the local authorities' perspective, there was always an understanding that the Treasury would fund the pay raise, he said. But since there has been no progress in discussions with the ministry, the local authorities might strike on Friday, he added. "From the beginning we were saying: 'Meet with us, tell us where we're going to get the money,'" Dannos said. "We're for the workers; we don't want to get to a situation where we're not paying our workers. This is a struggle, and the local authorities may strike." The Finance Ministry said it was only responsible for paying state employees, and that although the Union of Local Authorities and other large public-sector employers sat in on the negotiations, it was not the responsibility of the ministry to pay their employees. "Payment policy in the public sector has established that the state funds the pay raises of state employees only," a ministry spokeswoman said Thursday. "The responsibility for paying employees of local authorities and other bodies is not the state's, but rather that of the bodies themselves." Although the union did not sign the agreement, it should pay for the increased salaries, the spokeswoman said. She said the union felt obligated to increase salaries because its employees had protested and because the agreement between the ministry and the Histadrut was meant to serve as an example for government employers on all levels. "The agreement is an example of what should happen," the Treasury spokeswoman said. "If the local authorities want to participate, they need to raise the salaries. The local authorities are acting against the agreement and are denying their workers the pay raise." According to Histadrut spokesman Eyal Malma, although the local authorities were bound by the agreement, the ministry must help them fund the raise because the local authorities do not have the means to do so. The most important issue was whether the employees would be paid on time, he added. "The workers need the raise," he said. "Who pays it is not our problem. The government is required to pay because they're the ones with the money. It seems now that they won't pay, but the people who will suffer in the end are the workers." Malma also raised the possibility of a work stoppage. But if the local authorities struck on Friday, the Histadrut would not participate, he said. "If they don't get paid in a week, maybe we'll strike," he said. "[The local authorities] need to consider their moves and we need to consider ours as well."