The Proposed "Softened Rabbis Bill" Complicates the Budgeting Process for Religious Councils

The recently proposed bill runs counter to accepted budgeting principles and undermines the autonomy of local governance.

Photo by Noam Revkin/Flash90

This Professional Opinion, submitted to the Knesset Constitution, Law and Justice Committee, addresses a proposed bill to establish an additional funding mechanism for religious councils, commonly known in Israeli public discourse as "Rabbis Bill 2" or the "Softened Rabbis Bill."

Background – The Current State of Affairs:

A religious council is an independent public authority that provides religious services to the Jewish public. There are 129 religious councils nationwide providing services to most local authorities in areas including kashrut supervision, ritual slaughter, mikvah maintenance, marriage registration, burial services, rabbinical services, the establishment of eruvim (enclosures for Sabbath observance), and support for religious and cultural activities and institutions. The councils’ budgets comprise funding from the Ministry of Religious Services, local authorities, and self-generated income from service fees.

Each year, the state budget law redefines the total amount the government is authorized to allocate to all religious councils in Israel. The government then distributes these funds among the councils based on equitable criteria. Local authorities must contribute 1.5 times the total government allocation, creating a foundational budget of 60% from local authorities and 40% from the government.[1] In addition, religious councils generate revenue from service fees and receive limited government funds for specific projects, such as mikvah renovations. In 2022, the total budget for religious councils was 952 million NIS. Essentially, the core budget provided by the Ministry of Religious Services and local authorities constitutes the primary funding base for these councils, enabling them to cover service costs, including employee salaries.

Key Points of the Proposed Law:

The proposed bill seeks to establish an additional budgeting mechanism for religious councils, separate from the existing system. According to the proposal, the government could cover salary and expenses for specific roles in religious councils as determined by the minister without requiring additional budget contributions from local authorities. Due to concerns that the bill’s primary aim is to fund additional rabbinical positions within the councils—a goal explicitly mentioned in the bill’s explanatory notes—the bill is perceived in the media as a vehicle for appointing additional rabbis, hence the nicknames the bill was given above.

Outlined below are three key reservations regarding the proposed law:

1. Problematic and Centralized Budgeting Mechanism Undermining the Autonomy of Religious Councils:

The proposed funding mechanism introduces a unique and unconventional model that is not accepted in the public sector and lacks substantial justification. This legal framework proposed would create two distinct government funding tracks for the same services: one based on the council’s size and needs and the other based on specific job types. Furthermore, the mechanism does not limit the minister's budget for staffing roles within the councils.

Under the current funding model, religious councils receive a general budget and can allocate funds according to locally identified needs. For instance, a council may decide to increase funding for services for the Ethiopian community, while another might allocate more to its mikvah budget. In contrast, the proposed model would grant the Minister of Religious Services authority to dictate specific roles eligible for funding within religious councils, even if there is no substantial local need. Such earmarked budgeting is a highly centralized model that restricts local autonomy. [2]

Additionally, funding specific roles within ongoing operations is not considered acceptable in the relationship between the Ministry of the Interior and local authorities. Since the proposed bill does not cap the funding amount channelled through this new mechanism, there is concern that increasing budgets will flow into this model, further eroding the autonomy of religious councils. Therefore, if the government intends to increase the budgets for religious councils, it is recommended that they do so through the existing funding mechanism.

2. Absence of a Financial Problems in the Religious Councils:

The underlying assumption of the proposal is that religious councils face a budgetary shortfall requiring increased government funding. However, the State Comptroller’s report from May 2023 presents an entirely different picture. The report revealed that, as of 2020, religious councils had a cumulative surplus of 427 million NIS, excluding funds for cemetery development. The Comptroller’s findings indicated that the councils’ expenditures consistently fell below their initial budgets and regular revenues. [3]

Our analysis of the religious councils’ budgets shows that this trend continued in 2021 and 2022. For instance, in 2021, the total income of all councils was 946 million NIS, while expenditures amounted to 875 million NIS (92%).[4]

3. Issues in Staffing Standards within Religious Councils:

A comprehensive study by the undersigned on Israel’s religious councils highlights significant staffing issues in these bodies. An analysis of numerous audit reports from the State Comptroller and local authority auditors reveals widespread instances of employing personnel beyond the approved allocations, wage discrepancies, and severe deficiencies in hiring practices. [5]

In light of these findings, the legal advisory opinion to the Constitution Committee on the proposed law states: "The Committee is advised to consider whether creating a legislative mechanism enabling the Minister of Religious Services to increase funding to religious councils specifically for the criticized areas aligns with the audit findings?"[6]  These comments underscore the problematic nature of the proposed funding model.

In summary, although the bill's title is "Regulating the Budget Allocation Method for Religious Councils," the proposal complicates the budgeting process for religious councils. It runs counter to accepted budgeting principles and undermines the autonomy of local governance. Given the budget surpluses in religious councils, the proposal also needs more substantial justification.

 

[1] In the past, each religious council received its budget according to a fixed model in which the local authority contributed 60% and the government provided 40%. However, the government is now authorized to establish a differentiated funding model, allowing the 60%/40% formula to be maintained at the aggregate level across all local authorities, though not necessarily within each authority.

[2] For further reading on this topic, see: Ariel Finkelstein and Yuval Bartov, The Framework of Relations Between the Central Government and Local Authorities, The Israel Democracy Institute, 2023, pp. 59-63.

[3] State Comptroller, Financial Audit of the Religious Councils, State Comptroller’s Report, May 2023..

[4] Ariel Finkelstein, Ayala Goldberg, Shlomit Ravitzky Tur-Paz, and Yaari Padan, Biennial Report on Religion and State in Israel 2024, Israel Democracy Institute (forthcoming).

[5]Ariel Finkelstein, The Religious Councils: Religious Services, Public Administration, and Politics, Israel Democracy Institute, 2018, pp. 100-122.

[6] Legal Opinion of the Legal Advisory to the Constitution, Law and Justice Committee on the Proposed Bill, July 1, 2024.