As Smotrich holds up funding, some Arab Israeli mayors allege racism
Finance minister’s decision to withhold $55 million for economic development in the Arab sector ‘exacerbating the cycle of poverty and violence,’ says Umm al-Fahm mayor
Sam Sokol is the Times of Israel's political correspondent. He was previously a reporter for the Jerusalem Post, Jewish Telegraphic Agency and Haaretz. He is the author of "Putin’s Hybrid War and the Jews"
On Tuesday afternoon, Finance Minister Bezalel Smotrich held a press conference in Jerusalem to discuss the upcoming 2025 state budget, which he said will entail NIS 35 billion ($9.5 billion) in fiscal adjustments as the result of “the longest and most expensive war in Israel’s history.”
Touting his economic record, Smotrich said that his policies had “kept society and national resilience alive” and that he had worked to “rebuild trust” following the “huge crisis between the state and its citizens” caused by the war.
However, Smotrich’s trust-rebuilding efforts have failed to bear fruit with representatives of Israel’s sizable Arab minority, whose leaders believe he has sacrificed their communities’ economic well-being due to prejudice.
In June, the National Committee of Heads of Arab Local Authorities brought a lawsuit against the finance minister before the High Court of Justice, alleging that he was illegally withholding hundreds of millions of shekels from Arab towns across the country, thereby forcing the cancellation of essential municipal services for “racist” reasons.
Over the objections of Interior Minister Moshe Arbel, Smotrich is currently withholding NIS 200 million ($55 million) set aside for economic development in the Arab sector.
“The effect of the cuts on Arab society is dramatic,” Samir Mahamid, the mayor of Umm al-Fahm, the third-largest Arab city in Israel, told The Times of Israel in a telephone interview.
“The cuts will cause the reduction of education and welfare programs that have already been implemented, deepening the gaps and exacerbating the cycle of poverty and violence,” he said. Mahamid claimed that Smotrich and ultranationalist National Security Minister Itamar Ben Gvir had imposed their agenda on the government and are causing “enormous economic and social damage to Arab society and Israeli society as a whole.”
The far-right Smotrich told national broadcaster Kan that he is “reconsidering” the transfer of funds as he weighs his “priorities” for the money and the “supervision mechanisms” in place, arguing that the Netanyahu government is “not beholden” to a coalition promise made by the previous government.
The funds, aimed at boosting the economy, upgrading infrastructure and fighting crime in Arab communities, were approved in 2021 as part of a five-year plan by the short-lived Bennett-Lapid unity government, which included the Islamist Ra’am party alongside left-wing, centrist and right-wing parties. It was intended to replace a 2016 plan passed under Prime Minister Benjamin Netanyahu which had by then expired.
Smotrich, who also held up last year’s funding, has argued that the money would disappear into the hands of organized crime groups or be used to support terror activities.
Such an argument is “completely incorrect,” argued Fuad Awad, the mayor of Mazra’a, a town only 12 kilometers from the Lebanese border.
“This budget is intended for education, for welfare, workers’ salaries, garbage collection and the environment” and unless it is handed over by the end of September his city will need to cut back on basic services.
“We will be obligated to halt lighting at 12 at night. If we now collect the garbage once a week on Sunday, now it will be once every two weeks. All of the afterschool programs for the children in the afternoons will be ended,” Awad said, warning that failing to properly allocate funding to Arab towns could prompt an exodus, worsening conditions even more.
“Those who are better off will leave Arab towns for Jewish ones and those left will be the poor and there will be more crime and it will be more dangerous,” he asserted, noting that the government had already canceled programs aimed at combating crime in the Arab community.
Crime in the Arab community has skyrocketed in recent years, with more Arabs killed in homicides in 2023 than in any previous year, according to the Abraham Initiatives, a coexistence organization that tracks crime statistics.
A 2020 Knesset report found that some 400,000 illegal firearms are circulating in Israel, the vast majority in Arab communities.
Many community leaders blame the police, who they say have failed to crack down on powerful criminal organizations and largely ignore the violence. They also point to decades of neglect and discrimination by government offices as the root cause of the problem.
State Comptroller Matanyahu Englman last year dismissed the government’s response as inadequate. Smotrich has blamed Ben Gvir for failing to curb the flow of weapons into Arab towns.
Also accusing Smotrich of racism, Awad noted that the money due to be transferred under the five-year plan had already been cut by 15 percent when the Knesset passed Israel’s amended 2024 budget in March.
Continuing to cut funds to the Arab sector will eventually harm the national economy, he claimed, arguing that “if there is less crime there are fewer prisons. Prisons cost money. This causes the public purse great damage.”
Amir Bisharat, the CEO of the National Committee of Heads of Arab Local Authorities, agreed with Awad, insisting that further cuts would endanger “programs for youth at risk, programs for education, informal education in the afternoons, all of which are things that the councils do to reduce violence as much as possible.”
Smotrich claims “that the money is going to crime organizations” but “he is mistaken,” Bisharat said, charging that the minister was acting “illegally” because he was acting “without the go-ahead of the [Knesset] Finance Committee.”
Bisharat believes the High Court will eventually overturn Smotrich’s decision even though the overall trend remains negative. He argued that while things had begun to improve under the previous government, “the rise of the extreme right of Ben Gvir and Smotrich” has done significant damage.
“Now we are seeing the repercussions,” he said.
Mahamid and Awad said that Arab participation in governing coalitions is necessary to ensure the flow of money to their communities.
“I think we must send representatives who will be in the coalition. It’s their job to care about Arab society and in order to do this they need to be in the coalition and to receive coalition funds [in order to] close gaps and advance Arab society,” Awad said. “I think it’s an obligation on every MK from the Arab sector to influence and to plan for the good for Arab society.”
Bisharat, on the other hand, declined to state an opinion on the matter, insisting that “every government, including this one, should care about [all] its citizens.”
“If we live in fear every day, under existential threat on a daily basis, the government has to deal with that unconnected to who is in the coalition,” he said.
Taking care of Arab Israelis is “not a favor that the prime minister needs to do but a moral obligation of a state to care for its citizens,” he declared, arguing that “for the good of the economy you need to invest in Arab society because it is the sector with the biggest potential.”
A spokesman for Smotrich promised a statement but did not end up sending an official response.
He did, however, recommend asking the politicians who spoke with The Times of Israel if they were “not upset by the fact that most of the Arab authorities’ money flows to criminal organizations.”
Arab crime organizations threaten and extort contractors and have pressured municipalities directly, even going so far as to target mayors, but the spokesman did not provide any proof for his claim regarding the extent of the phenomenon.
Smotrich’s spokesman also sent a link to a column by Kalman Libeskind stating that millions of shekels in Education Ministry funding for the Arab sector had been misappropriated, and insisted that “there are also reports from the Education Ministry.”
A spokeswoman for the Education Ministry said that “the matter is under review.”
Times of Israel staff contributed to this report.
