Pocket change

Information on the economic sustainability and population of Jerusalem

By YAIR ASSAF-SHAPIRA
Old city view 521 (photo credit: A view of the Old City from Tower of David)
Old city view 521
(photo credit: A view of the Old City from Tower of David)
It is customarily thought that Jerusalem, having little economic activity compared with other major cities, does not generate significant income of its own, relies on government support, and is allocated a larger budget than other cities. And indeed, the government’s contribution to the regular budget of the city is large – totaling about NIS 1 billion in 2010.
Some of this contribution comes from a special grant – the “capital grant” that Jerusalem enjoys under the “Jerusalem Law.”
This grant totaled about NIS 200 million in 2010. For the sake of comparison, the government’s contribution to the regular budget of Haifa was NIS 653m., and its contribution to Tel Aviv’s budget was NIS 475m.
But it is also important to remember that our city has a large population. Jerusalem’s population is three times the size of Haifa’s and twice that of Tel Aviv. In order to provide services to its 788,100 residents, it needs a larger budget. In Jerusalem, accordingly, everything is large, so the self-generated income of its municipality is higher than that of Haifa, for example. It is appropriate, therefore, to examine governmental contributions to municipal budgets in relation to the cities’ population size.
This examination reveals that the government’s contribution to the regular municipal budget of Jerusalem in 2010 totaled NIS 1,374 per capita. This amount is lower than the figure for Haifa, at NIS 2,434 per capita, comparable to that of Rishon Lezion (1,368) and higher than the figure for Tel Aviv-Jaffa (1,175). An examination of 198 localities in the country – cities and local councils – shows that Jerusalem is in 164th place. In other words, a large majority of localities receive a larger government contribution of income per resident than Jerusalem does.
The self-generated income of the Jerusalem Municipality was primarily drawn from municipal taxes, reaching NIS 2.5b., or NIS 3,194 per capita. In total, the city’s income reached NIS 3.6b., or NIS 4,569 per capita, slightly higher than the figure for Modi’in-Maccabim-Reut (4,453) but significantly lower than all the major cities.