Equality in Debt Collection

Tira is one of the most important Arab towns in Israel. It is right in the center of the country, and its socio-economic rating, as of 2004, was 79 out of the 210 ranked local authorities. In the terms of the Interior Ministry, Tira is in the fourth socio-economic echelon, out of ten.

Tira ended the year 2005 with a deficit of NIS 55 million, a bit of an improvement compared with the NIS 57 million deficit it posted in 2004.  But it is a deficit and means that the city is basically broke.

The municipality surely has its explanations for this situation, but there is one overriding factor. Its rate of city tax (arnona) debt collection from its residents was just 19% in 2004.

Nor is Tira unusual in that respect. The bottom third of the local authorities in Israel, going by debt collection rates, are all Arab towns. 75 of these local governments, from Laqia in the Negev with a collection rate of 2%, to Qabul, with a rate of 55%, are all Arab; it's only when you get to 76th place that you encounter the first Jewish town, Migdal, with a collection rate of 55%.

The figures show that Arab towns are reluctant to collect city taxes from their residents. You say these towns are the poorest in Israel? These collection figures are after discounts.

The Interior Ministry sets collection targets for each town in consideration of the town's socio-economic makeup. The poorest towns get targets discounted by as much as 80% compared with wealthy towns. Yet the Arab towns still fail to reach even their lowered collection targets.

You might suspect that the Interior Ministry is deviously setting unbearably high rates even after the discount. So let's look at the Bedouin town of Rahat, which is in the lowest tier, the fourth poorest town in Israel. No doubt Rahat could find any number of excuses for low collection. But its mayor, Talal al-Krinawi, thinks otherwise, and the actual rate of collection in Rahat is 59%, which is one of the highest in the sector of Arab towns.

That is not the only data supporting the absence of any connection between low socio-economic status and arnona collection. The ultra-Orthodox town of Beitar Ilit is also among the poorest in Israel, but its city tax collection in 2004 was the highest in Israel, at 144%, which means that it collected every cent plus some debts from the past.

Or one can point at Afula, which is in the fifth socio-economic echelon, or Ramat Hasharon, in the ninth. The gaps between their statuses are large, yet both collected 88% of due tax.

These examples, especially that of Rahat, demonstrate that what's missing in city tax collection is not more discounts, but determination by the city officials. Officials at the Israeli ministries charge that  the clannish nature of Arab society means the town leaders aren't taking steps that would be unpopular in their social circles, for instance, demanding that relatives pay tax.

In conversation with TheMarker, Rahat mayor al- Krinawi concedes that the ministries have a point: he explains his success in collecting city tax on having a majority in the city council. He doesn't need a coalition.

"The Arab authorities demand equal rights, but they forget that first of all they have to fulfill the same duties that the Jewish authorities do, first and foremost to collect tax from the residents," complain Jerusalem circles. Without tax collection, the Arab towns are in a state of perpetual crisis, and all plans and programs to better their lot go nowhere. They can't pay their workers and the distance from there to a nationwide strike is short indeed.

To the credit of the Arab municipalities, there is an argument that the Interior Ministry discriminates against them: Shuki Khatib, who until recently led an umbrella body representing the Arab local authorities, claims the ministry draws the borders leaving outside the rich industrial and employment zones that would supply high tax income. Khatib notes the example of the Zipporit industrial zone, which is annexed to Upper Nazareth (Jewish) instead of to the Arab towns actually next to it.

He probably has a point. But the numbers tell a story, that even leaving out discrimination in arnona from businesses, collection rates in the Arab sector are very low. Khatib admits it, by the way: "We have to try harder," he says. He himself put out a circular saying that paying city tax is an act of patriotism, he says. But it will take time for the message to filter through.