Israeli Supreme Court Blocks Most Ultra-Orthodox Funding, Releases 78 Million Shekels for Religious Services

The Israeli Supreme Court rejected Finance Minister Bezalel Smotrich's request to cancel an interim injunction freezing hundreds of millions of shekels allocated by the Knesset Finance Committee in early August. The injunction was issued following a petition claiming the committee's session was illegal. However, the court agreed to Smotrich's request to exempt and release 78 million shekels designated solely for the Ministry of Religious Services. Following the ruling, the ministry's director general, Yehuda Avidan, rescinded his order to close religious sites due to budget shortages.

The frozen funds, totaling 366 million shekels, were primarily intended for ultra-Orthodox and religious Zionist institutions, including non-state recognized education, national service programs, and cultural initiatives. Additional transfers of 125 million shekels to the Settlement Ministry and 78 million to the Ministry of Religious Services were also approved. The petition was filed by the Hiddush Association for Freedom of Religion and Equality and Knesset member Naama Lazimi, challenging the legality of the Finance Committee's session during the election recess and the approval of these budgets.

The Finance Ministry initially opposed releasing any funds before the petition was fully resolved, contradicting the court's earlier directive to identify urgent budgets for immediate release. Smotrich requested that only funds for rabbinical courts be exempted from the freeze. Critics accused the minister of using budget allocations as political leverage, bundling urgent funds with controversial payments to ultra-Orthodox institutions and settlements.

Yehuda Avidan praised the court's decision for preventing harm to worshippers and thanked Religious Services Minister and Deputy Prime Minister Yariv Levin and Shas party leader Aryeh Deri for their support. Conversely, attorney Dr. Ifat Solel of Hiddush condemned Smotrich for prioritizing political allies over public needs and indicated further legal action to enforce separation between urgent and unlawful funds. Knesset member Lazimi accused Smotrich of mafia-like tactics, holding critical budgets hostage to secure illegal funding for settlements and partisan education networks, vowing to prevent continued misappropriation of public funds.