Representatives from a number of the country's municipalities petitioned the Knesset Finance Committee on Tuesday in an effort to secure additional funding for their cities while protesting the intended raising of interest rates they are charged by the country's five largest banks, which they claim have earned hundreds of millions of shekels off interest payouts and kickbacks from the municipalities over the last few years.
"If the banks are earning so much money off of us, why are they planning on making things more difficult for us by raising the interest rates?" asked Chen Ron, assistant economic director in the central municipal office. "It is because they blindly want to view us as strong independent economic bodies instead of the weak and in need of support public institutions that we are."
According to the municipal representatives, who were at the Knesset as part of the government's "Municipality Day" functions, Israel's largest banks, comprised of Leumi, Hapoalim, Discount, Mizrahi-Tefahot and First International, in 2005, earned some NIS 320 million from interest paid to them by the municipalities. Additionally, they noted, that in 2006 the municipalities received NIS 4 billion towards their budgets from the central government but they ended paying out more than NIS 6b. in taxes and other charges.
Ron claimed that the country's municipalities are currently NIS 7.18b. in debt and indicated that their combined residents and business owners owe some NIS 15b. in arnona taxes.
"We, therefore, have a significant number of municipalities who are unable to pay proper wages to their workers, can't pay contracters for work that was done and can't offer the standard municipal services," he said.
Chairman of the Finance Committee, MK Stas Misezhnikov, proposed at the meeting the creation of a "municipality law," aimed at aiding the municipalities, to be drawn up and presented to the Ministerial Committee on Legislation for approval in the near future.
"I understand the pain that you (the municipalities) are going through as I served on the municipal board of Rishon Lezion and I understand the great efforts that you are making," he said. "Therefore, I want to let you know that this committee can be counted on as partner to strengthen and improve the current situation in the municipalities and hopefully we will work together to make things better."
Municipal leaders from Karmiel, Yokne'am, Hatzor HaGlilit, Kfar Shmaryahu and Beit She'an were present at the meeting.
Separately, on Tuesday, the Finance Committee created two subcommittees - one to be headed by MK Haim Katz to investigate current pension plans and one dedicated to aiding industry, to be chaired by MK Eli Aflolo. Additionally, it approved NIS 34m. to aid in the recovery of Israel's war-torn northern region, badly damaged during last summer's Second Lebanon War, as well as the Sderot region, which has suffered from Kassam rocket attacks over the last few weeks.