Coalition Funds Skyrocket in Israel, Raising Oversight Concerns
Coalition funds, which are budget additions allocated based on coalition party demands outside the regular budget, have seen a dramatic increase in Israel. In 2023, these funds amounted to approximately 5.8 billion shekels, rising to about 7.9 billion shekels in 2024. This is a significant jump from the 680 to 942 million shekels allocated annually between 2017 and 2022, excluding 2019. A substantial portion of these funds has been directed towards yeshivas (Orthodox Jewish seminaries), ultra-Orthodox educational institutions, settlement initiatives, and programs focused on "Jewish identity."
A report by the State Comptroller found that many of these funds were not cut during the recent war, and some were even increased. For 2025, the government approved around 5 billion shekels in coalition funds, with 1.27 billion earmarked for yeshivas and kollels, and over 1.84 billion allocated to ultra-Orthodox educational institutions. The declared amount for 2026 is also around 5 billion shekels, with some reports suggesting it could reach nearly 6 billion.
These coalition funds are integrated into the state budget, government decisions, or budgetary transfers approved by the Knesset's Finance Committee, and are then disbursed through government ministries. They are not automatically carried over to the next year and are valid only for the period specified in the coalition agreement. While not all budget additions negotiated during coalition talks are considered coalition funds, those serving the general public are typically incorporated into the budget through standard procedures.
Concerns have been raised about the allocation and oversight of these funds. For instance, the State Comptroller noted that while the Finance Minister decided to reallocate 1.6 billion shekels of coalition funds for war needs, only 869 million were actually diverted. Furthermore, the Israeli Democracy Institute reported that nearly 2 billion shekels in coalition funds for 2025 were transferred to ultra-Orthodox educational institutions without adequate oversight, potentially violating proper administration and equality principles.
Legal challenges have also arisen. In August 2026, the Supreme Court froze transfers approved by the Finance Committee during an election recess, including funds for ultra-Orthodox education and the Ministry of Settlement. The court later ordered a separation between urgent and coalition-specific items. Historically, the Supreme Court has generally upheld coalition agreements, provided the allocated funds are for legitimate public purposes and are proportionate, though specific criteria and oversight remain points of contention.
