Israeli cities strike over tax plan as budget deadline looms

[May 15, 2023]  By Ari Rabinovitch and Steven Scheer

JERUSALEM (Reuters) - Many of the biggest and wealthiest cities in Israel went on strike on Monday over a plan to reallocate their tax income, opening a new front against the government that is already under pressure over a contested judicial reform.

The strike, bringing school closures and a halt to garbage collection for millions of Israelis, also complicates a bid to pass a 2023-2024 state budget. If a budget is not passed by the end of the month a new election must be called.

The dispute is over a proposed fund that would dip into commercial property taxes collected by municipalities. The fund would then be distributed nationwide as an incentive to build more residential property.

The government says it will help alleviate a housing shortage and lower costs that have soared over the past 15 years due to strong demand and limited supply. The city halls, who have not decided how long the strike will last, say it is an intrusion of federal authority that in the end will not help.

"We will fight for the rights of our residents," said Haim Bibas, mayor of the city Modiin in central Israel and head of the Federation of Local Authorities. "It's not our role to come up with budget funding to solve national crises."

More than 70 cities, including commercial hubs Tel Aviv and Haifa that will be paying more heavily into the property tax fund, joined the strike. Israel's largest municipality, Jerusalem, which relies heavily on state funding given its relatively poor population, did not.

Israelis working in the hi-tech sector hold the national flag of Israel and a banner with the Hebrew words "The hi-tech protest" as they demonstrate against proposed judicial reforms by Israel's new right-wing government in Tel Aviv, Israel January 24, 2023. REUTERS/Corinna Kern/File Photo

Finance Minister Bezalel Smotrich said he would not give in and that the property tax fund would be passed as part of legislation for the 2023-2024 budget.

"Unfortunately, some of the heads of the federation and mayors are fighting you, us and whoever wants to lower the cost of housing," Smotrich said in press conference hours before the strike began.

Prime Minister Benjamin Netanyahu's government, which came to power late last year, already faces unending mass protests over a proposed judicial overhaul.

Tens of thousands of Israelis have taken to the streets on a weekly basis in opposition to Netanyahu's push to give politicians greater sway over selecting judges and to limit the power of the Supreme Court to strike down legislation. Under pressure at home and abroad, Netanyahu has temporarily put it on hold.

Parliament has already given its initial approval for the 2023-2024 budget but it still needs to pass two more votes.

(Reporting by Ari Rabinovitch and Steven Scheer; Editing by Alex Richardson)

[© 2023 Thomson Reuters. All rights reserved.]This material may not be published, broadcast, rewritten or redistributed.  Thompson Reuters is solely responsible for this content.