Pending Ministry Approval, Hefty Municipal Tax Hikes Expected Next Year

Givatayim residents will certainly be surprised to hear that their municipal property tax (arnona) is increasing by a whole 9.63 percent in 2010. This includes a 1.63 percent increase due to the Interior Ministry's arnona update. The municipal council is due to convene at the end of the month and is expected to approve the increase, the city's largest in the past 17 years.

Givatayim's neighbor, Ramat Gan, is also planning to raise taxes next year. The municipal council has approved a 4.5 percent increase, along with the 1.63 percent update. The municipal finance committee and the council are expected to approve this later this week, increasing arnona by a total of 6.13 percent.

Holon is also planning a 1 percent increase beyond the ministry's update, and in Ra'anana, where tax rates have not changed for 15 years, the municipal council on Thursday approved a 5.5 percent hike beyond the update.

All these irregular increases must receive the ministry's approval.

Municipal officials deny that they are placing the burden on their residents instead of becoming more efficient.

"When I began my term, the municipality was not in great shape, with a deficit and debts," said Givatayim Mayor Reuven Ben-Shahar. Balancing the budget "is not at all simple," he said. "Meanwhile, there are all sorts of expenditures that the government has stopped paying, such as education, special education and welfare, which we continue to pay for; higher wage agreements; and the establishment of a water corporation."

Ben-Shahar said he does not want to harm the municipality's quality of services. Meanwhile, the municipality is also undergoing an efficiency process, and dozens of employees will be dismissed, he says.

A spokesman for the Ramat Gan municipality said: "In order to continue to provide the residents of Ramat Gan with the same high level of services, the city's management decided unanimously to update arnona rates in accordance with the increase in the cost-of-living index, VAT, and the fact that arnona was not updated for so many years. Ramat Gan, unlike most other municipalities, does not get budget-balancing grants from the government. For years it has been creating its own resources, out of nothing, so it can continue giving residents the best service possible."

The spokesman added that the municipality would end the fiscal year without any debt, and that the arnona increase was due to a 4-percent increase in the cost-of-living index over a period when municipal taxes did not change.

Holon mayor Motti Sasson, said: "We have a lot of problems with this arnona business. Water rates are increasing, as are electricity rates, and workers are getting a raise. Where will you get the money? The government has cut education and welfare [subsidies]. Someone has to pay for that; otherwise, the residents will suffer. We are raising arnona to maintain the level of services."

In Ra'anana, officials attributed the arnona hike to the losses incurred in setting up the water corporation. The officials pointed out also that Ra'anana has lower tax rates than neighboring cities in the Sharon.