Municipal Leaders Threaten to Halt School Construction Over Hidden Funding Report

Israel’s local authority leaders are warning they may stop building new classrooms unless the Education Ministry and the Finance Ministry publish an external report on school construction funding. The dispute, reported by N12, comes just before the new school year and raises the risk of additional disruption to the opening of classes.

The Federation of Local Authorities says the ministries are withholding the findings of a report they commissioned on the real cost of building classrooms. In a letter sent last week to Finance Minister Bezalel Smotrich, federation chair and Modi'in Mayor Haim Bibas said the local authorities had already submitted their own analysis, but the Education Ministry then commissioned a separate external review. Bibas asked Smotrich to release the findings immediately and convene a joint meeting of the finance ministry, education ministry and local authorities to agree on a new funding model.

According to the local authorities, there is already a shortfall of 1.5 billion shekels between current state funding and the amount needed for the next school year, 2026/7. Bibas said, “Any further delay means real harm,” and added that construction cannot continue when municipalities must cover more than 50% of building costs from their own budgets. He said the state must provide classrooms according to need and demanded full transparency and an urgent budget solution.

The federation also says the gap is severe in specific categories, with a 52% mismatch for kindergartens, which cost about 500,000 shekels to build, and a 36% gap for schools, whose basic construction cost is estimated at 9 million shekels. It says the Education Ministry forecasts a need for 23,000 classrooms, while the approved five-year plan funds only 17,000. Mayors from Rahat, Holon and Rehovot backed the warning, saying state participation has eroded and does not match real costs. The ministries responded that the external review is still being finalized, with a draft report under internal discussion and clarification requests still pending.