Local Authorities Threaten to Halt Classroom Construction Over Hidden Education Funding Report

Israel’s local authority leaders say they will stop building new classrooms unless the Education Ministry and Treasury publish an external report on the cost of school construction that they jointly commissioned. The warning comes just before the next school year, and the Israel Local Government Center says the secrecy could deepen the annual risk of delayed openings and shortages in school infrastructure.

The issue was raised in a letter last week from Center chairman and Modi'in Mayor Haim Bibas to Finance Minister Bezalel Smotrich, after what the municipalities describe as repeated unanswered requests to Education Minister Yoav Kisch and his ministry. Bibas said the local government body had already submitted its own review of the funding gaps, but the ministry then ordered a separate outside study. He called on Smotrich to release the findings immediately and convene a joint meeting with the Finance Ministry, Education Ministry, and local authorities to agree on a revised funding model.

According to the local authorities, the gap between current state funding and actual construction needs has reached 1.5 billion shekels for the coming school year, 2026/27. Bibas said, “Any further delay means real harm,” adding, “We will not be able to continue building classrooms when the authorities are forced to cover more than 50% of construction costs from their own budgets.” The local government center also says the ministry’s construction tariff committee has finished its work and passed the results to the Treasury, but the process has stalled.

The municipalities cite especially large gaps in practice: kindergarten construction is funded at 52% below actual cost, with a kindergarten estimated at 500,000 shekels, while school construction is funded 36% below actual cost, with a basic school building estimated at 9 million shekels. They say the Education Ministry’s forecast requires 23,000 classrooms, but the approved five-year plan funds only 17,000. Senior mayors from Rahat, Holon, and Rehovot also said current allocations do not cover real costs and leave local projects stuck for years. The Education Ministry said the review is not finished and that the contractor’s draft was returned for clarifications, while the Treasury said the findings are still being refined in internal inter-ministerial work. The ministry added that the classroom-building budget is updated regularly under the Central Bureau of Statistics construction input index, and that the five-year plan was approved by the government in 2022.