Deal Will Suspend Drought Tax, but Increase Water Rates

Water rates are to increase by 40%, in three stages between January 1, 2010 and January 1, 2012, while the drought surcharge is to be suspended from January 1 until April 15, 2010. The compromise hammered out this weekend among the Prime Minister's Office and the ministries of finance and national infrastructure does not, however, specify whether the "drought tax" will be automatically renewed on April 16, despite the Water Authority's demand that such a provision be attached.

Water rates are to rise by 25% on January 1, by 12.8% on July 1 and by an additional 2% on January 1, 2011.

A copy of the agreement was sent to cabinet members by the director general of the Prime Minister's Office, Eyal Gabai. It will be submitted today to the Ministerial Committee for Legislation, which is expected to approve the surcharge's suspension. The expectation in the Knesset is that the "drought tax" will not be renewed.

As part of the agreement, people with disabilities will not have to submit a doctor's note in order to receive a discount on the surcharge. In addition, the deadline for reporting the number of persons in each household - used to calculate the water usage quota for each residence - has been extended to December 31, 2009.

The agreement prohibits the cabinet from cutting the budget for water development programs. It also instructs the ministries of finance and national infrastructure to formulate a plan for aiding local water and sewerage authorities that are in financial trouble before January 1.