Local, regional authorities file High Court petition against 'Arnona Law'

Published: JULY 9, 2023 18:27

New Israeli Shekel banknotes and coins are seen in this picture illustration taken November 9, 2021. (photo credit: REUTERS/NIR ELIAS) — New Israeli Shekel banknotes and coins are seen in this picture illustration taken November 9, 2021.

(photo credit: REUTERS/NIR ELIAS)

Israeli authorities have argued that the "Arnona Law" could harm citizens and have detrimental economic effects on numerous localities.

The umbrella bodies representing local and regional authorities in Israel filed a petition to the High Court of Justice against the "Arnona Law" that would redistribute commercial building taxes, the organizations announced on Sunday.

The Federation of Local Authorities in Israel and Federation of Regional Government in Israel asked the High Court to issue a temporary order against the Arnona Law, which was passed with the Economic Arrangements Bill in May.

The law, which aims to incentivize the building of residential buildings by redistributing commercial building taxes from wealthier localities to poorer areas, would, according to the federations, harm 68% of citizens and damage the economic situation in over 200 local authorities.

The federations claimed that the law was passed despite broad opposition from hundreds of local authorities, experts and politicians.

The formulation of the law would not result in the desired outcome, the organizations claimed. The Finance Ministry used faulty data, and almost all the local authorities will lose from the fund which will only become more of a drain over time.

Chairman of the Federation of Local Authorities and Mayor of Modi'in Haim Bibas and head of the local authorities attend a protest outside the Prime Minister's Office in Jerusalem, demanding better budgets, February 26, 2023. (credit: YONATAN SINDEL/FLASH90)

Concerns over the 'Arnona Law'

"The local authorities will not be able to cooperate with the property tax robbery law passed by the government," Local Authorities Federation head Haim Bibas said.

The petition joins those filed by the Labor Party and other local authorities at the end of May. The previous petition argued that the legislation was launched during a military operation when many local leaders were unable to join Knesset discussions. The suit also took issue that the law would not benefit Arab local authorities, which are in particular need of investment and proper residential development.

Jerusalem Post Staff contributed to this report.