Between Extravagant Waste and Cutbacks

Make no mistake. Despite all the difficulties and cuts, a council head must make do within the limits of his budget, he must not exceed it and not take bank loans.

Yehoshua Saguy was elected mayor of Bat Yam in 1993. He received a city in excellent condition, with no deficit and no debts. Saguy, a Likud man, served as mayor for almost 10 years, and dragged Bat Yam backward: he did not see to the cleanliness and infrastructures, specialized in appointing cronies, financed luxury office suites for functionaries, and at the end of such a glorious career, left his successor a fading, extinguished town, suffering from a NIS 71 million current deficit and an accumulative NIS 170 million debt.

Shlomo Lahiani received the inheritance and today he does not know how to close the deficit and return the debt to the banks, and where to cut first. He must reduce the personnel roster by 200 workers. Saguy, in contrast, is laughing all the way to Manila. In tribute to his excellent management skills, Ariel Sharon appointed him Israeli ambassador to the Philippines.

Today Sharon is piously rolling his eyes, and does not understand why the public is blaming the government for the crisis. But what message did he convey to the authority heads by giving Saguy such a generous gift? The signal is clear: you can continue exceeding your budget, appoint political cronies, and waste money like there's no tomorrow, because ultimately it does not matter at all in what condition you left your wretched town. All that matters is personal connections - preferably from the army - and belonging to the right party.

Bat Yam is only one example of many. Yahud's new mayor, Yossi Ben-David, wrote a letter to the attorney general recently telling him that in 1993 there were 237 municipal employees. In 1998 their number soared to 500, mostly political cronies appointed by the mayor. At the end of the `90s the municipality had to reduce the number of its workers and now it must fire another 100.

The council head of Jaljoulya, Faik Uda, recently informed Interior Minister Avraham Poraz that he objects to the appointment of a supervising accountant as part of a recovery plan. Uda refuses to have an accountant supervise him, because if he fails to keep the conditions of the recovery plan, the interior minister will be able to dismiss him. He preferred the tried and tested method of continuing not to pay his workers' wages to exert political pressure on the cabinet, until the interior and finance ministers give in and give him the money without a supervising accountant.

These are only a few examples of the wasteful, reckless and extravagant management of many local authorities, which deteriorated for many years until they accumulated huge deficits and debts to banks and suppliers. Today these reach NIS 8 billion.

However, the local authority heads are not the only ones to blame. In March 2003, Poraz presented a plan to reduce the number of authorities from 266 to 150 to increase their efficiency. The plan was not carried out because Sharon and Benjamin Netanyahu took fright from the Likud central committee's reaction and backed down. On the other hand, the cabinet slashed NIS 1 billion from the balancing grants, which struck the weaker authorities another blow.

The ministry's plans for budget cuts worsened the authorities' situation considerably. When a ministry's budget is cut, it immediately transfers the burden onto the local authorities. For example, when the education budget is cut, the ministry does not fire teachers or clerks, but reduces its allocations to the local authorities.

When the Transportation Ministry's budget was cut, it stopped transferring to the authorities money to maintain roads. When the Tourism Ministry's development budget was slashed, the ministry reduced its part in establishing tourist facilities in the authorities.

But make no mistake. Despite all the difficulties and cuts, a council head must make do within the limits of his budget, he must not exceed it and not take bank loans. Anyone who is incapable of that, anyone who cannot stand the heat, should get out of the kitchen.