Knesset panel approves shifting 36 million shekels in religious council funding to weaker local authorities

The Knesset Finance Committee on Tuesday approved the 2026 formula for local authority participation in the budgets of religious councils, keeping the overall total unchanged while redistributing about 36 million shekels from stronger municipalities to weaker ones. Under the new allocation, wealthier authorities will pay a larger share, and weaker ones a smaller share, with some municipalities covering only 25% of religious services and others up to 75%. The total local authority contribution for 2026 will be 259 million shekels, 3 million more than in 2025.

At the start of the hearing, Rauma Tzach-Levy, representing the Ministry of Religious Services, said the religious councils’ budget is set within the state budget and that the request did not change the total amount, only the percentage split between strong and weak authorities in non-regional religious councils. By law, the state funds 40% of religious council budgets and local authorities fund 60%. The proposal follows the same approach used in recent years, with the aim of easing the burden on weaker municipalities.

MK Yinon Azoulay, who chaired the discussion, said the financing burden should not fall on local authorities. “We know the burden should not be on the authority,” he said, adding that the goal is to bring the model closer to the way the state funds education and welfare, where it covers 75%. The ministry’s representative said this has been the ministry’s request from the Treasury for years, but it has not advanced because no budget source was found.

Several lawmakers and local government representatives criticized the system. MK Orly Fraksch Hacohen argued that all citizens should receive religious services at the same price and warned that the change could raise taxes in stronger municipalities. Authorities’ representatives called the current setup “sick and invalid,” and said local governments already shoulder a heavy load. The head of Meitar’s local council, Shimon Peretz, said his settlement’s balance grant is nearly zero and that the yearly burden is significant. Jerusalem’s religious buildings division chief said the city covers 63% of its religious council budget and spends tens of millions more on religious infrastructure. The committee also asked about 40 million shekels allocated in the 2026 state budget for additional religious service providers, but the ministry said that money is separate and not part of this decision. The committee then approved the split.