Government Priorities Perpetuate Poverty in Arab Local Authorities

In November 2025, the National Planning and Building Council decided to cancel a plan promoted by the Haifa District Committee for five years. The project aimed to establish an employment zone on 1,400 dunams west of Highway 6, near Kibbutz Lehavot Haviva, providing an economic horizon for the Triangle cities of Baqa al-Gharbiyye and Jatt.

The State Comptroller's report on "Gaps in the own revenues of local authorities" from June 2026 reveals that this cancellation was not accidental. Despite recognizing the urgent need for income sources in poor peripheral authorities, the Ministry of Interior effectively prevents the establishment of joint employment zones for Arabs and Jews.

The Economic Divide

The report highlights a massive gap in municipal tax (arnona) revenues. While central cities like Tel Aviv, Ramat Gan, Herzliya, and Ra'anana rely on own revenues for 74–80% of their budgets, Arab localities in the center, such as Jaljulia, Tira, Kafr Bara, and Kafr Qasim, see rates ranging from only 8.4% to 39%. Bedouin localities in the Negev face even worse conditions.

This gap is largely due to a lack of arnona from employment zones. Local authorities rely on residential and commercial arnona; the latter is more profitable due to higher rates and lower service consumption. Research by the Sikkuy-Aufoq organization and the Injaz Center shows that while Jewish authorities derive 56% of their revenue from employment zones, Arab authorities derive only 32%, with 68% coming from residential property.

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Systemic Barriers

The Knesset Research and Information Center has noted that joint employment zones could alleviate these disparities by adjusting municipal boundaries to allow smaller localities to share revenue from nearby industrial parks. However, when Arab localities are involved, the process encounters systemic barriers.

The Comptroller's report documents significant delays: a 2017 request by the Kafr Kanna council to share revenue with Nof HaGalil remains stalled, as does a 2016 request from Nazareth. The Bustan al-Marj Regional Council only succeeded in securing a share of the Alon Tavor employment zone revenue after 11 years of litigation and a Supreme Court petition.

The Ministry of Interior attributes these delays to the ministers' "comprehensive spatial view," frequent election cycles, and shifting priorities. Unsurprisingly, these priorities align with a long-standing policy that perpetuates economic and social gaps. The state's surrender to pressure from stronger authorities, which benefit from higher arnona revenues, is clear evidence of the politicization of the planning system. With the recent government-approved cuts to the five-year economic development plan for Arab society, the vicious cycle of poverty remains unbroken.

Guy Nardi is a housing and land coordinator at the Sikkuy-Aufoq organization.