Cabinet okays $1.6 billion in coalition funds, including $715 million for ultra-Orthodox

Prime Minister Benjamin Netanyahu’s government approved the inclusion of over NIS 5 billion ($1.6 billion) in discretionary coalition funds for Haredi institutions, West Bank settlements and other party priorities in the 2026 state budget on Tuesday, drawing harsh condemnations from opposition politicians who claimed the allocations constituted a subsidy for draft evasion.

Coalition funds are money allocated in the budget-planning process based on agreements struck between the parties during coalition negotiations over the formation of the government.

According to Hebrew media reports, the Finance Ministry opposed the allocation of the funds — 53.19 percent, or NIS 2.2 billion ($714.8 million) of which went to the ultra-Orthodox community, according to a study by the by the Berl Katznelson Center think tank.

The funds include NIS 1.56 billion for Torah institutions such as yeshivas and kollels (yeshivas for married men), NIS 6 million (around $2 million) for economic development efforts in the Haredi community, and NIS 77 million ($24.9 million) for Haredi cultural activities.

Coalition funds to the tune of NIS 75 million ($24.3 million) will flow to “recognized but unofficial schools,” which commit to teaching 75 percent of the curriculum and receive 75 percent of the funding of state schools — while so-called exempt schools, which receive about 55 percent of the funding allocated to state schools, provided they teach 55 percent of the core curriculum, will receive NIS 32 million ($10.3 million).

An additional NIS 49 million ($15.8 million) will go toward programs aimed at preventing youths, some of whom are viewed as at-risk of substance abuse or crime, from dropping out of yeshivas or leaving the ultra-Orthodox community.

Dropout yeshivas are geared toward Haredi men who are not interested in full-time religious study and are widely seen as part of the wider effort to prevent them from being conscripted into the IDF. Last summer, the government announced that it would halt funding for such institutions starting in 2026.

The coalition funds approved on Tuesday also include NIS 257 million ($83.5 million) for programs to promote food security, NIS 206 million ($66.9 million) for development of the Negev and Galilee, and NIS 400 million ($129.5 million) for the Settlements and National Missions Ministry, which supports West Bank settlements as well as various right-wing and religious activities.

According to the Berl Katznelson Center study, the level of coalition funds allocated reached an “unprecedented” high during the current government’s tenure, peaking at NIS 5.5 billion ($1.7 billion) in 2024.

Speaking with The Times of Israel on Tuesday evening, Berl Katznelson Center deputy director Aviad Houminer-Rosenblum said that the approval of coalition funds for the ultra-Orthodox — which came on top of a planned increase in spending on Haredi education of nearly a billion shekels ($324 million) —  is intended to offset the transfer of nearly a billion shekels to Haredi schools recently blocked by the High Court of Justice because they had failed to teach core curriculum subjects as required by law.

“This is a terrible, awful decision. It’s delusional. Coalition funds used to be in the range of a few hundred million up to a billion. This government has brought it to a new record,” he said, accusing the government of boosting spending while failing to meet the needs of those affected by the ongoing war with Iran.

“The government is proposing a compensation outline for those not working right now that is very, very stingy and doesn’t provide full compensation,” Houminer-Rosenblum argued. “We calculated that if the government had provided a full and generous compensation outline for employees and the self-employed, you could have fully funded such a plan for two weeks using just these coalition funds.”

The decision to approve the coalition funds came under harsh criticism from the leaders of the anti-Netanyahu bloc on Tuesday afternoon.

“While the people of Israel are fighting on the front lines, this government is busy looting the public purse,” declared former prime minister Naftali Bennett.

“Like thieves in the night,” the government “is now secretly transferring billions of shekels of political money to evaders under the guise of an emergency budget,” he declared. “They are transferring these billions not to defense, not to the families of the reservists, not to the reconstruction of the north and the south,” and “they think that because the people of Israel are preoccupied with the war, they will not notice that they are looting us.”

“Those funds could have been allocated to security, reservists, health, welfare, education, and rehabilitation. But the Netanyahu-Goldknopf-Smotrich government invests solely in itself: draft dodging, settlements, and corruption,” tweeted The Democrats chairman Yair Golan.

Ahead of the vote, Yesh Atid MK Vladimir Beliak, who heads his party’s effort to stymie the coalition’s budget, insisted that “the only way to maintain the standard of living and even improve it is through economic growth. And to encourage growth, at the very least, we shouldn’t be funding ignorance and idleness.”