Knesset ignores law, costs J’lem NIS 760m.

Study released claims that the government's failure to comply with the law will cost J'lem millions of shekel over five year period.

May 5, 2013 22:37
2 minute read.
The Jerusalem Post

Shekels money 370. (photo credit: Ariel Jerozolimski/Bloomberg)


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A study released this week claims that failure by the government to enforce a Basic Law mandating that all government employees work within the capital has cost the city more than NIS 760 million over the past five years.

The study, conducted by Jerusalem-based economic expert Uri Dahan, was commissioned by Jerusalem City Council member Meirav Cohen of Awakening in Jerusalem.

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According to Cohen, over 4,000 employees from various ministries are currently working outside Jerusalem, defying the 1980 Basic Law decreeing that all government employees based in Jerusalem must work within the city.

“In 2007 there was finally a government decision declaring that by 2015 all public bodies and government institutions would be based in Jerusalem,” said Cohen.

“However, presently there are still over 4,000 government employees working and living outside the city, which has prevented the infusion of hundreds of millions of shekels into our economy.”

The study found that 80 percent of people who work in Jerusalem also live there, thus directly benefiting the capital’s economy. Furthermore, it concluded that, based on three economic metrics, if the 4,000 workers came to live and work in Jerusalem, over NIS 760m. would be generated within a five-year period.

The first economic variable takes into account property tax (arnona), which the report found would generate NIS 200m. over five years.

The second variable is based on what the study called an “employment multiplier,” which concluded that the ratio between employment and government industrial expenditures would create NIS 94m. in five years.

Most significantly, the third variable of the study found that over NIS 470m. would be infused into the economy based entirely on cost-of-living expenses, including rent, home purchases, food costs, entertainment expenditures and general spending of disposable income.

“Our research shows that during a five-year period, these government employees will buy and rent homes and spend much of their disposable income into the local economy,” said Cohen.

“For example, we found that if you have someone working and living in Jerusalem, they will spend NIS 5,349 a year on fruit and vegetables alone,” she continued.

“However, if that same person lives in Tel Aviv and works in Jerusalem, he will only spend NIS 662 a year in this city. It’s a big difference that adds up.”

Cohen said the fault for not enforcing the Basic Law’s mandate lies with the government itself, which she said could solve many of Jerusalem’s economic woes by finally sanctioning it.

“If the government did what it said it would do by moving all of its offices to Jerusalem, then hundreds of millions of shekels would be pouring into the city’s economy, and Jerusalem wouldn’t be one of the poorest cities in Israel,” she said.

“Every year when Jerusalem Day comes, people discuss the importance of the city and how it is supposed to be the political and cultural epicenter of Israel, but when it comes to practice, the government just isn’t doing enough,” Cohen added.

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