Report: Settlements Receive Disproportionate State Funding

Study by the Adva Center finds that settlement population has grown 240% in 20 years.

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New homes being built in the West Bank settlement of Betar Ilit, September 4, 2014.
New homes being built in the West Bank settlement of Betar Ilit, September 4, 2014.Credit: AFP

Residents of the Israeli settlements have received a disproportionate amount of state funds over the past 20 years, particularly those in non-Haredi settlements, according to a new report by the Adva Center.

Following settlers, residents of Arab towns receive the second-highest amount of state funds per capita, followed by outlying and poor towns. Bottom of the list are residents of the major, economically stable cities.

The Adva Center report focuses on inequality in government funding for municipal budgets. The latest report (published biannually) looked at the years 1991 to 2012, and examined four groups of locales – the so-called big 15 group of established cities, 25 of the so-called development towns in outlying areas, Arab towns and regional authorities, and settlements. The report distinguishes settlements with an ultra-Orthodox majority from the other settlements.

The report’s authors, Dr. Shlomo Swirski and Etty Konor Attias, note that the number of settlement residents has grown significantly over these 20 years, and is up 240% – from 100,000 residents in 1991 to 360,000 as of 2012. In comparison, Israel’s population grew by 60% over that period.

Most of the settlement population growth was concentrated in three ultra-Orthodox communities: Immanuel, Betar Ilit and Modi’in Ilit. These towns expanded by 375%. The population of non-Haredi settlements grew by 80% over the two decades examined.

Population growth in Arab towns worked out to 100% over the past two decades. The outlying towns expanded by 55%, while established cities grew only 35%.

Government assistance to municipal budgets comes in two forms – government funding of national services that are delivered by the municipalities, particularly education and welfare; and budget-balancing grants for the weaker municipalities. The 15 major cities, for instance, are not eligible for such grants.

According to the report, in 2012 the government’s largest investment per capita was in the settlements, once balancing grants were removed from the equation. Settlement residents received an average of 2,695 shekels ($750) in government funding a year. Residents of Arab towns received an average of 2,277 shekels a year, while those in outlying towns received 1,892 shekels a year. Residents of big cities received a mere 1,684 shekels.

The largest jump in government investment over the past two decades was in the Arab towns (again, after subtracting balancing grants). Government money for Arab towns tripled over this period, and was up from 750 shekels per capita 20 years ago.

In fact, government investment increased in all towns except for outlying towns over this 20-year period. In these towns, funding actually decreased.

The policy analysis institute’s report also found what appeared to be a major gap between ultra-Orthodox settlements and non-Haredi settlements. Residents of non-Haredi settlements received average government funding of 3,213 shekels per person a year, versus 1,359 shekels in the Haredi settlements. Again, these figures exclude balancing grants.

However, the explanation for this gap is merely technical – the funding for the Haredi education system is transferred directly to the educational organizations, as opposed to going through the municipalities. Another reason is that some Haredi schools receive only partial government funding.

The report also found that balancing grants shrunk considerably following the end of the second intifada in 2003, until the financial crisis broke out in 2008. Arab communities benefited significantly from this money – the average resident of an Arab town received 746 shekels a year in balancing grants as of 1991, and this figure doubled to 1,464 shekels a year by 2001. However, due in part to budget cuts, Arab residents received an average of only 886 shekels a year in balancing grants by 2012. Outlying towns received an average of 671 shekels per capita as of 2012.

The residents of non-Haredi settlements received the most in this category – 1,108 shekels per capita a year. Residents of Haredi settlements received on average two-thirds of this sum.

The report also examines independent income by the four groups of communities. The big cities had the highest income per capita, at 5,401 shekels a year as of 2012. The outlying towns came in second, at 3,626 shekels per capita, while the towns in the West Bank and the Golan Heights brought in 2,690 shekels per capita on average. The non-Haredi settlements had revenues twice those of the Haredi settlements, at 3,049 shekels versus 1,464 shekels per capita. Last on the list was the Arab towns, with revenues of 1,406 shekels per capita.

The Arab and Haredi towns trail on the list because they often lack commercial space where businesses pay commercial municipal tax rates, and because they have high poverty rates, making municipal tax collection difficult.

Adva also examined municipal expenditure per capita. The settlements topped the list, with an average of 7,416 shekels spent on each resident as of 2012. This is higher than the 7,066 shekels spent by the big towns on their residents. Development towns spent an average of 6,443 shekels, while Arab municipalities spent an average of 4,688 shekels and Haredi settlements an average of 3,596 shekels per capita.

“The ideological settlements, the non-Haredi ones, give their residents – via massive government assistance – a quality of life that all of Israel would want,” states Swirski.

Until 1997, the outlying towns were Israel’s main focus of growth, but that has given way to the settlements, he added.

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