Israeli Interior Ministry Imposes Sanctions on Bnei Brak Over 130 Million Shekel Deficit

The Israeli Ministry of Interior has imposed financial restrictions on the Bnei Brak municipality due to a massive accumulated deficit of 130 million shekels. The city ended 2025 with an 80 million shekel deficit and recorded an additional 50 million shekel deficit in the second quarter of 2026. If the municipality fails to achieve budgetary balance by the end of the year, the ministry plans to appoint a financial overseer to closely monitor and control its fiscal decisions.

This week, Zvika Invinder, the Interior Ministry's commissioner for the Tel Aviv district, informed Bnei Brak Mayor Chanoch Zeibert of the sanctions. These include freezing all requests for personal contracts and salary upgrades and approving only essential one-time budget projects. The mayor has been ordered to submit an emergency plan by October 11 to restore budget balance. Invinder urged the city leadership to convene urgently and adopt "binding and painful decisions" to reduce the deficit, particularly in procurement, tenders, and personnel.

If appointed, the financial overseer will have authority over all significant financial actions, including hiring, payments, and revenue collection, severely limiting the municipality's autonomy. Bnei Brak, Israel's sixth-largest city, has rapidly deteriorated financially during Zeibert's tenure, despite receiving a 20 million shekel increase in its balancing grant in 2025. The city's cash flow crisis has forced it to sell securities worth 30 million shekels and utilize nearly its entire 90 million shekel credit line.

The municipality has delayed payments to suppliers and owes 30 million shekels to the water corporation, which itself struggles financially. The 2025 financial report has not yet been presented to the city council, reportedly due to opposition concerns. Critics within the municipality blame Zeibert's management, while some officials attribute the crisis partly to the Interior Ministry's lack of a minister and delays in approving property tax discounts and municipal bylaws that could increase revenue.

Despite a substantial annual budget of approximately 2.5 billion shekels and significant income from business centers, Bnei Brak faces a severe financial crisis. The Interior Ministry warns that failure to correct the situation will lead to further stringent measures. The mayor did not respond to requests for comment.