Taxed to the max

Many city councillors do not understand why CityPass should receive a property tax discount for its depot at taxpayers' expense.

By PEGGY CIDOR
light rail depot 521 (photo credit: Marc Israel Sellem)
light rail depot 521
(photo credit: Marc Israel Sellem)
Our sages taught us that he who has a lot of property also has a lot of worries, perhaps as a warning for us not to pursue wealth. However, a roof over one’s head is certainly not to be considered greedy, although even such a basic asset takes its toll – namely the arnona, or property tax, we pay to the municipality.
According to law, the Knesset decides on the amount of tax we have to pay every year and imposes it on all the local and regional councils through the Interior Ministry. As part of the obligation to pay the tax, the state provides the councils with a list of cases where a tax reduction or a full exemption can be granted, such as needy residents, lowincome families and religious institutions. But the state is not very generous here. For example, nonprofit organizations that work to help needy populations do not usually receive a discount.
In very rare cases, a mayor – with the approval of the councils and the ministry – can propose a property tax reduction to a business if s/he believes that such a step would encourage the business to remain in the city for the benefit of its economy.
Such was the case with Mayor Nir Barkat. In his first months in office, he told some bank managements that they would get a substantial tax reduction if they agreed to keep their regional offices in the capital (to prevent their moving to the center of the country and firing their local employees). Many council members, including quite a few from Barkat’s coalition, were embarrassed by this proposal, arguing that banks should not be granted such assistance at the taxpayers’ expense. The decision, however, was ultimately approved and implemented.
But now it’s happening again. This time, however, it is raising such strong opposition that for the moment it has not gone beyond the first stage – the municipal finance committee’s weekly meeting. This time the proposed tax reduction is not for a bank but for CityPass, the light rail company. The company’s offices and the depot where the railcars are parked are located in French Hill, on the border of Isawiya. Sources within CityPass say that Barkat promised to reduce their annual property tax if it made a simple change – reclassify its large compound.
In return for this change of location, CityPass would pay NIS 400,000 less for 2012. And that means NIS 400,000 less in the city’s coffers. City council member Elisha Peleg, Likud representative in Barkat’s coalition, is very angry about it. Although for the moment he has managed to convince some of his colleagues in the coalition to vote against the decision on the finance committee, he has no illusions.
“I know the mayor will ultimately get what he wants because he has several means to accomplish it. He can require coalition discipline or he can persuade the city councillors – he has the power to do that. But I’m not going to make it easy for him this time, even if it won’t help to prevent this move. This is outrageous! I think that, in fact, CityPass should pay reparations to the merchants in the city center for all the losses in income it has caused them, certainly not a reduction in taxes!” says Peleg.
And if that were not enough salt being rubbed on our (tax) wounds, the latest news from the ministry is that the increase in property tax for 2012 will be 3.6 percent.
“So while Jerusalem residents will once again have to pay more than any other city in the country,” says city councillor and head of the control committee Meir Turgeman, “despite the fact that the number of needy families here is so high, CityPass, which has poisoned our life for years, will receive a substantial reduction, and frankly nobody even understands why. After all, it can’t threaten us that without it it will move out of Jerusalem – it’s not a bank!”
Finance committee chairman David Hadari says that the lower property tax rate for CityPass would not be a discount, but simply a different categorization, since the depot is in an area that has a lot of factories and warehouses.