We Are Helping Arab Towns Fail

Not only do they collect less taxes, but only a small portion of the little they collect is invested in education.

How wide are educational gaps in Israel? The answer can be found in a study sponsored by the Finance Ministry that compared the amount of money different cities put into their school systems. At the top of the list was Herzliya, with NIS 5,000 per student, and at the bottom was the Bedouin city of Rahat, with just NIS 58.

This shows just how badly Israel's egalitarian school system is plagued by disparities. The probability that a student in Herzliya will enroll in higher education and then pursue a professional career is much higher than the probability that a student in Rahat will pursue the same course.

Herzliya is a much wealthier city than Rahat, and therefore, able to allocate considerably more money to education. But the disparities are aggravated by the way municipalities are run, in particular Arab municipalities. The issue is not only that Herzliya is wealthier and therefore has more money to invest in education; it also prioritizes education and makes more of an effort to support its schools. Herzliya invests 14% of its independent budget in education, whereas Rahat invests just 2%.

An comparison of the percentage of municipal allocated to education finds Arab municipalities at the bottom of the national list. The Circassian village of Kfar Kama, which puts 33% of its independent budget into education, is the exception. Most other Arab municipalities earmark just single-digit percentages of their budgets for education. Arab children then receive just a fraction of what their Jewish peers receive.

The disparities, therefore, stem not only from a general lack of resources, but also from misplaced priorities.

This tendency to conserve on education spending is one of the big failures of Arab municipalities. Another is the continued difficulties they encounter collecting municipal taxes. A study carried out by Dr. Rafik Haj shows that Arab municipalities manage to collect taxes from only 27.3% of their residents. This compares with 63.1% in Jewish municipalities that have equivalent economic rankings.

Lack of space

It appears, however, that the main problem plaguing Arab councils pertains to land. Last week, the Transportation Ministry proudly announced an affirmative action initiative it had undertaken to improve infrastructure work in Arab communities. The ministry said it had invested NIS 100 million in Arab communities last year (compared with NIS 150 million in other communities, excluding Israel's large cities ). This funding is problematic, however, because there is very little place to pave roads in Arab towns. Since Arab villages were originally built very densely, infrastructure work was not taken into account. And even when plans were drawn up, there was often illegal house construction obstructing areas where public infrastructures could be developed.

A study carried out in 2001 by the State Comptroller's Office revealed that 48% of Arab municipalities in Israel have no authorized development plan, and 15% have no sewage development plans. A 2006 Knesset study found that "in most Arab communities, urbanization processes were not accompanied by professional development plans, plans that encourage a comprehensive view of residents' needs." The implications are devastating. The absence of industrial zones and employments centers nears these communities keeps income levels low and limits the amount of tax revenues that can be collected by the municipalities. A lack of daycare facilities means that most small children stay at home, a phenomenon that has implications not only for the children but also for their mothers who cannot easily enter the job market.

The scarcity of land prevents young couples from finding homes and taking mortgages. But even illegal home construction, a widespread phenomenon in all these communities, does not offer a real solution to the malaise.

Arab municipal leaders bear a large part of the blame for the situation, ,but this does does not absolve Israel's Jewish majority from responsibility. Haj's study shows that one reason for low rates of municipal tax collection in Arab municipalities is overall poverty. Municipal tax rates, measured as a percentage of a family's income, are 50% higher among Arab families than Jewish families.

According to Haj's calculation, if Arab municipalities were to succeed in collecting taxes from 100% of their residents, the revenues would cover just 52% of their expenses. That's because these municipalities collect virtually no municipal business taxes. In Arab municipalities, residential taxes comprise 66% of total revenues, as compared with 43 percent in Jewish municipalities, where a much higher volume of business taxes is collected. It is virtually impossible for a municipality to survive today based on residential taxes alone.

Why aren't Arab municipalities able to collect business taxes? Because of the land problem once again. They don't have the space upon which to establish industrial zones, where businesses could operate.

Arab communities are organized on a individual basis (each village has its own separate council ), whereas Jewish communities organize on a regional basis, clustering into regional councils. In Israel's northern and southern peripheries, it is quite common that individual Arab towns are located next to industrial zones run by Jewish regional councils. In many areas in Israel, an industrial zone organized by a Jewish regional council borders an Arab community and is located on lands expropriated from the Arab community, in which case all revenues collected from the industrial zone flow into the coffers of the Jewish regional council.

In effect, the state has left Arab municipalities without any revenue sources, severely limiting the type and amount of municipal services, including education, they are able to provide. The state supports these municipalities with various types of funding, but in the absence of independent sources of revenue and without improved administration, the Arab municipalities will remain behind and continue to be dependent on state handouts.