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The Education Ministry intends to cut approximately NIS 170 million from education funding to municipalities, in order to cover part of the ministry's contribution to the agreement with the Teachers Federation. The rest of the funding is to be obtained by cutting deeply into the activities of various ministry departments.

The Israel Union of Local Authorities (IULA) says it is unaware of the ministry's plan.

"Everyone knows this is a 'ticking bomb' that will lead to war by the local authorities," a source familiar with the details of the plan said.

The cutbacks will reportedly affect schools in better-off communities.

Sources in the Education Ministry are said to be concerned that the new cuts will undermine the support the IULA has so far given Education Minister Yuli Tamir in the dispute with the secondary school teachers' organization.

The cost of the reform of the education system is estimated at approximately NIS 5 billion, to be spread out over six years. According to the agreement signed between the education and finance ministries, 82.5 percent of this sum is to be borne by the treasury and 17.5 percent by the Education Ministry.

In 2008, the Education Ministry pledged to channel NIS 170 million to this purpose from other budgetary items. The ministry must also make NIS 150 million in cuts from previous years.

According to the plan, the ministry will reportedly cut the NIS 150 million from its activities, and the NIS 170 million from the "auxiliary educational services" it provides to local authorities. This funding pays the salaries of janitors, secretaries, librarians and other employees. The cuts, amounting to some 20 percent of the budget, are to be made in the budgets of mostly socioeconomically strong communities.

A source said the treasury had taken advantage of Tamir's eagerness to reach an agreement with the teachers to demand that the Education Ministry contribute funding to the reform. "There is nothing left to cut in the Education Ministry. There is no more flesh, and not even many bones," the source said.

The Education Ministry has undergone some 30 cutbacks since 2002, slashing approximately NIS 4 billion. However, the ministry says that during this time it has also received generous additions to its budget and that in the final analysis its funding has grown.

The IULA called the intended cut in funding for the municipalities' education budgets "the crossing of all the red lines." IULA Chairman Ya'akov Agmon said, "We cannot bear another cut resembling those that were already implemented. I don't believe that in the very year the Education Ministry is implementing a reform they will strike at education in the local authorities."

The Education Ministry stated, "At this stage the agreement between the Education Ministry and the treasuries is on the overall budgetary framework, including the extent of the cut, estimated at some NIS 320 million. Discussions are to begin shortly between the two ministries regarding allocations for 2008."