Local Government Appeals Supreme Court Order Freezing Budget Transfers to Municipalities

The Center for Local Government has petitioned Israel's Supreme Court to cancel a recent interim order issued last Wednesday that froze several budget transfers approved by the Knesset Finance Committee before its dissolution for elections. The Center specifically seeks to unblock funds allocated for summer school programs, development projects in the Negev and northern border communities, and Ashkelon's rehabilitation plan.

The frozen funds include payments for staff who operated summer schools for children aged 3 to 6 and grades 1 through 6 during July 2026, which the Center argues are essential to allow parents to return to work and maintain subsidized educational frameworks. The petition also highlights funds reserved for at-risk youth programs and middle school activities, warning that delays could force local authorities into unplanned expenses or delayed salary payments.

Attorney Mira Salmon, head of the Knesset Administration at the Center, emphasized the urgency of advancing these budget allocations, calling them "not only appropriate and necessary but also urgent." The Center has requested an immediate hearing on the matter, though the Supreme Court has scheduled a full hearing on the broader petition for August 18, 2026.

The freeze was ordered by Supreme Court Justice Alex Stein following a petition by the Hadash organization and Knesset member Naama Lazimi (Labor), challenging the transfer of 366 million shekels to ultra-Orthodox and national-religious education frameworks, including summer school funding. The Finance Committee had approved these allocations about two weeks prior, covering various programs such as non-official recognized education, national service, religious education, dropout prevention, and cultural initiatives.

While the Center's petition has received support from Knesset representatives and legal advocates, the Finance Ministry has yet to respond. Justice Stein's order allows exceptions only for emergency civilian expenses, such as northern Israel's civil defense. Additional budget transfers approved later include 125 million shekels for the Settlement Division and 78 million for the Ministry of Religious Services.