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Municipal services across the country will be absent today as workers plan to go on a one-day strike to protest government cuts to state and city service funding from the Finance Ministry. All municipal services are to be shut down today except schools and the municipal hotline.

The Union of Local Authorities said that there would be more strikes if the Finance Ministry does not meet its demands.

The Jerusalem Municipality said it would exempt itself from the strike because of U.S. Vice President Joe Biden's visit there, but added it completely supported the struggle.

Local governments want the treasury to increase funding for government services it channels to the municipalities in 2010 to NIS 2.8 billion, and to agree to increase grants to NIS 3 billion by 2012.

The municipalities are also protesting the fact that they are increasingly having to allocate funds for services that are supposed to be paid for by the state, such as religious councils.

They are also demanding NIS 500 million be added to development budgets and NIS 600 million to economic recovery plans, and the establishment of a joint committee that would decide on a reform in water prices.

They also want local government to be be informed of planned amendments to the Economic Arrangements Law that affect the municipalities.

"The struggle is not just over the grants but also about good education and better quality of life for citizens," union chairman Shlomo Buhbut said yesterday at a press conference. "There is no reason that local authorities should raise municipal taxes because the state is cutting funding and the unjustified rise in water prices."

Buhbut said outlying towns as well as Arab and Druze villages and even wealthier towns "are in total collapse."

"If the treasury would agree today to sign [an agreement] with us for NIS 2.6 billion, not from the big cities or Mifal Hapayis [the lottery], but from state funds, and would talk to us about grants in 2011 and 2012, and the raising of water prices, the mayors would accept it."

Buhbut said the amount of the grants should be enshrined in law.

Municipalities receive grants according to a formula that set in by the public Gadish Committee, based on municipal income in relation to expenses per resident.

According to that formula, the state should be giving the cities about NIS 3 billion, but this year it only provided NIS 1.8 billion.

The state has been cutting back on the grants since 2003, when the grants stood at about NIS 3.5 billion.

The local authorities say the cutbacks damage the education, welfare, sanitation and security services cities provide. Cutting the funding means salaries to municipal workers are delayed and city budgets can't be balanced.

The cities are also protesting the rise in water rates for public institutions by more than 300 percent, as well as what they call the "nationalization of municipal budgets" - requiring cities to fund religious councils or unofficial educational institutions.

Buhbut said yesterday that the Prime Minister's Bureau had asked for time to reach an agreement but the Union of Local Authorities refused.

"This not a struggle between the local and the central authority. It is a struggle over funds that should be getting to citizens through the local authorities," Tel Aviv Mayor Ron Huldai said.