IN-DEPTH FEATURES
How Much do Chareidim Really Get?

This article is the third in a series that will appear from time to time discussing the allocation of public financial resources of the State of Israel.

The previous articles dealt with two issues: the claim that chareidim get a big monthly financial package from the government, and the claim that chareidim pay very little tax. They showed that the first claim is often based on calculations that are misleading to say the least, including support and subsidies that are received by everyone and calculating tax savings in a ridiculous manner, and that if the same calculations are made elsewhere they show that a typical secular family gets even more per month.

The second claim also breaks down under analysis. Most chareidim do work and pay taxes, for one thing, and also almost half the government's income is from indirect taxes on consumption like VAT, which certainly are paid by chareidi consumers as much as anyone else.

This part focuses on the money that is funneled to the various parties who have their fingers in the pie. It explains the important difference in the way chareidi institutions are funded, compared to the way that other comparable institutions are funded, namely, that regular institutions (such as boarding schools) are funded from the general budget, whereas all chareidi institutions are funded from support monies.

"Criteria" -- Sophisticated Money Laundering

The truth is that if we focus our attention on certain sections of the budget, we may detract from the gravity of the points we have made so far. Nevertheless, once we analyze the statistics of the official budget it will be seen that even when it comes to those sections of the budget where we allegedly receive more than the others, often the opposite is the case.

If we want to get a complete picture of the chareidi public's share of the treasury's funds, we have to take the budget as a whole and analyze the sections from which the chareidi public benefits and by how much.

A surprise awaits anyone who undertakes this. Because of the unique chareidi lifestyle, the chareidi public's share in several budgets is out of proportion to its share in the general population, but on the other hand it is discriminated against when it comes to most of the other budgets. On the whole, we lose out in a big way.

The truth is that it requires no special intelligence to realize that the chareidi public is discriminated against, since a state budget is a reflection of that state's character, and even so- called "egalitarian" criteria are really tailor- made to the needs of those in power.

The courts and the public always talk about instituting objective, universal criteria for disbursing funds, but criteria are not cast in stone; each minister draws them up based on his weltanschauung and personal interests. If a minister and his aides are sophisticated, they will more easily be able to hide these subjective considerations in the guise of "egalitarian criteria." These criteria remind one of the story about the arrow and the target: first you shoot the arrow, and then you draw the target around it.

In Communist societies budget funds are openly distributed according to party affiliation. Here in Israel they give the process a more respectable euphemism: "objective criteria." In practice, this system is nothing more than a sophisticated process of money laundering within the context of a democratic state. That is how personal interests (an unpleasant word) are given a legal stamp of approval.

In a secular, anti-religious state such as Israel, the budgets naturally cater to the needs of the secular citizen, and take almost no account of the needs of the chareidi taxpayer. If, despite all the odds, we still get some crumbs from the budgetary cake, this is only due to the constant battles of our faithful religious representatives and those talented and energetic workers who still manage to find appropriate criteria for chareidi activities.

We may quote in this context an unusual article by Arye Kaspi published in Ha'aretz on January 7, 2000 with the headline "Extorting the Extortioners." The writer worked out how much money each chareidi pupil receives from the Ministry of Education's general budget and concluded that there was clear discrimination against the chareidi educational system. We quote: "The rules of the game, as in many other areas of our lives, fulfill the needs of the powerful sectors of society. The requirements of the weak sectors do not meet the criteria!"

The change of governments in the past decade illustrate more than anything the extent to which criteria are predetermined according to personal needs and interests. The current left- wing government, for example, transferred funds from the religious to the Arab educational systems, in one fell swoop depriving NRP-affiliated schools of several hours of study. The government also cancelled the status of living areas the previous government had declared as development areas with special economic benefits, causing immense damage to factories, local councils and even schools.

In the more distant past, the political turnaround of '77, when the Likud came to power for the first time since the founding of the State, led to a dramatic reduction of funding to the kibbutzim, resulting in their eventual collapse.

"Egalitarian" criteria are also drawn up by interested parties. Every Minister or Head of Department formulates whichever criteria suit the needs of his associates.

The most recent Minister of Education, Yossi Sarid of Meretz, was among the most industrious in this area. Before even taking up his chair, he had managed to enact several dangerous regulations, both regarding the syllabuses of study in the schools (including, for example, the "educational" poetry of the Palestinian poet Darwish) and regarding the budget, as we will soon see.

Regulation Number 31.08.75, called "Non-Orthodox Jewish Organizations," promulgated within the framework of Zionist Torah culture, allocated NIS 2,096,000 to the Conservative movement. These regulations are issued on the sole authority of the minister in charge. Regulation Number 31.20.55 called "Secular Organizations Dealing with Jewish Topics" within the general framework of "Educational Institutions" served as the vehicle for the allocation of NIS 2,593,000 to the Reform movement. These funds may have been used to finance these movements' aggressive advertising campaigns in the media advocating civil non-halachic marriages.

"Waste" or "Necessity"

Last year the Ministry of Education allocated large sums for the establishment of multinational schools for children of foreign workers and Arab collaborators. Each school is multi- lingual with only a small number of pupils in each class. This ostentatious project has to be housed somewhere, and so there are plans afoot to close existing schools in Tel Aviv (Bialik and Shorashim, both well-established schools set up decades ago) and to use their buildings to house these multi- national schools.

Similarly, the Ministry of Absorption is allocating NIS 1.93 billion for the purposes of absorbing immigrants, most of whom these days are not Jewish. Again, we see criteria being formulated which reflect secular values and money being distributed accordingly.

Financial assistance of yeshivos is termed a waste of government funds, whereas the allocation of billions of Shekels to projects catering to their values is considered legitimate and justified.

Whether anything is considered wasteful or necessary for society depends on the values and outlook of the person making the evaluation.

Indirect Aid

Indirect financial assistance sometimes involves even larger sums. For example, for many years Israeli governments gave preference to products manufactured by kibbutzim, thereby benefiting their economies directly. The Likud in 1977 and thereafter, under the leadership of Finance Minister Simcha Ehrlich, created a real revolution in this area. Up to then products were purchased from kibbutzim even if they were more expensive than those available elsewhere.

"National Priority Areas" (whose residents are entitled to special grants and tax benefits as described below) are also determined according to party or other personal considerations. A good example of this is the government's decision that settlements nine kilometers away from the border are not to be included in the list of settlements close to the "line of confrontation (kav imut)." When it came to light that two kibbutzim would be excluded from this category, the government simply decided to extend the "line" slightly and thereby not deprive their faithful followers of benefits.

One of the first moves of the present regime was to cancel the grants to the chareidi development of Elad. It took considerable efforts on the part of Yahadus HaTorah representatives to delay the coming into force of this decision by four months.

Recently a meeting was held of Government Ministry Directors General in which a new map of priority areas was drawn up. The new program did not include even one chareidi settlement! All the chareidi settlements included until then -- such as Modi'in Illit, Beitar Illit and Tel Zion -- were taken off of the list.

Anyone living within a "National Priority Area" benefits from the following: housing benefits and grants, mortgages, bonuses and supplements to wages, exemption from educational fees for children of kindergarten age and reduced income taxes. There are currently 432 settlements which come within the category of "National Priority Area A." National Priority Area B, which included 74 settlements, was abolished by the current government entirely.

Some 23,250 teachers are employed within the framework of incentives offered by National Priority Area A settlements. These include gaining "seniority" status more quickly, rent subsidies (80%), subsidy of school and transport fees (75%), subsidy of transport costs during sabbaticals (100%), personal contracts and special remuneration (80%).

Pork Barrel Road Construction in Israel

The road infrastructure in Israel is another -- albeit more cunning -- illustration of the allocation of indirect benefits. Anyone who takes a close look at the central intersections of Israel's roads, will discover that the location of many of these just "happen" to be situated within the area of a kibbutz. Of course, it is difficult to prove this contention, but there are clear indications that the Israeli road system has been planned in such a way that important intersections fall within the area owned by a kibbutz with connections to those in authority.

This can throw off a number of benefits to the surrounding kibbutz. For one the kibbutz must be compensated when the land is taken for the road. Later on, drivers will often take the opportunity to stop to rest and have a meal at the nearby kibbutz-run restaurant. (In defense of the road planners, it should be pointed out that it is a difficult task in Israel to build roads which will not, at some stage, cross kibbutz- owned land.)

Licenses to set up and run gas stations are granted to associates of those who pull the strings. A gas station comes with a parking lot, small shopping center, restaurant and more. In short, anyone who receives the sought-after permit makes a nice living.

Space does not allow us to go into further detail and explore this point in depth; we may summarize by stating that those entitled to benefit from budgetary funds have to meet certain criteria, and since these are fixed by secular elements, usually affiliated with the Left, the main beneficiaries end up being associates of those who formulate the criteria.

Who are the Beneficiaries of the State Budget?

The secular public in Israel is almost totally unfamiliar with the concept of private donations to finance public activities. Every public or community activity is financed by the Israeli taxpayer one way or another, either via national government departments or via local authorities. In many cases, both sources are used.

Seminars on topics such as "The Influence of Vegetation on the Environment" or "Ancient Chinese Flower Culture" are subsidized by government funds. Moreover, these seminars are not held in some rundown shtiebel, but in a luxury hotel with full artistic accompaniment and refreshments, in order to attract some bored people. The logistics of these events and advertising in newspapers cost tens of thousands of shekels.

Meetings organized by the chareidi public, on the other hand, have never received any funds, since shemiras haloshon rallies, ladies' evenings and mussar droshos do not meet any criteria of the Education, Culture and Sport Ministry.

Events which come under the category of culture and entertainment, such as displays, marches, fireworks, festivals, summer or winter activities and so on, cost hundreds of thousands of shekels, whereas chareidi cultural events are financed by the chareidi public, and at best we manage a few crumbs from the State cake.

One evening of a fireworks display at the local community center, including artistic performers costs about NIS 200,000. The "Israel-Jerusalem" celebrations were financed by the Education Ministry to the tune of two million shekels.

Whereas chareidi libraries and yeshiva otzros can only be maintained from donors' generosity, secular libraries receive massive funding from the Education Ministry and local government. Libraries in higher educational institutions often receive, in addition, funds from the institution itself.

The difference between the two sectors is even more conspicuous when we consider the building situation. Beautiful public buildings which serve the secular public are financed by public funds on plots which cost nothing, whereas public buildings catering to the chareidi public are dependent on donors to finance the land, the buildings and the operations. Up to now they have not been taxed, but now they want to start taxing them.

It has to be stressed that even if we would act according to the rules and formulate our needs to match their categories, so that a yeshiva otzar would be called a "research library," a chevras Tehillim could be "cultural enrichment," a siddur or Chumash siyum a "show" or "play," we call a siyum maseches, a "winter semester graduation ceremony," a shemiras haloshon rally a "seminar on interpersonal relationships," and shiurim to Russian baalei teshuva would be called "cultural study groups for new immigrants" -- even then the chances of receiving funding are next to nothing. Enterprising activists who can prove that their organizations meet the relevant criteria are told that there is no money left for them, since they were not taken into account when the budget was drawn up. However, we do not mean to discourage any future attempts to find decent clerks in government offices who, thank G-d, still exist.

"Budget" and "Support"

Rabbi Yaakov Gutterman, the man behind the scenes who until recently helped chareidi representatives with matters related to the budget (now he is mayor of Kiryat Sefer) explains: "The key to understanding this topic lies in the terms `budget' (taktziv) and `support' (temicha). The chareidi public is hardly ever included within one of the sections of the standard budget, but only within the framework of support. That is why we are discriminated against in all government offices.

"Criteria for the budget are formulated to accommodate the needs of the (majority?) secular society and in most cases are totally irrelevant to the chareidi public, so that we are forced to make do with the small amounts allocated to us within the support framework. Most of the sums to which each government ministry is entitled are swallowed up by the ministry's budget, and the budget is allocated automatically, whereas money from the support fund has to be fought for anew each year. To say that we receive more than the secular public is simply a lie!"

"We have to understand," adds Rabbi Gutterman, "that the fact that we are not included in the general budget, but only in the support sections, means that all the funds we do receive stand on very shaky foundations and we remain dependent on the graces of the minister in power. The support sections are always the most vulnerable parts of a Ministry's finances and are the easiest to cut back on under pressure.

"The criteria for entitlement to support funds are also very easy to change. This results in a situation where a chareidi institution can never be sure of its financial situation for the following year. Every minister appoints an associate to serve as Chairman of the Support Committee in his ministry, and he has full discretion to draw up rules regarding the distribution of the Ministry's budget allocation for support. Of course, a legal tender takes place, but everybody knows that the result is a foregone conclusion. The Minister and Chairman naturally have their own preferences, our needs being -- at best -- at the bottom of their list of priorities.

"Funds may be allocated one year on the basis of how many individual activities took place, and the year after that on another basis, such as the number of participants in recognized activities, or to development areas, or to the extent to which the local authority is willing to participate in funding. Everything depends on the particular interests of those bodies associated with the minister in charge of that Ministry.

"It therefore happens that organizations, after several years of receiving a certain sum and planning all their activities on that basis, suddenly find themselves in serious financial trouble. Moreover, support funds are not paid on time, and sometimes money is only released at the end of the financial year, with the result that the organization goes into deficit and has to pay interest on its debts.

"In order to receive support, an organization has to set up an amuta (a nonprofit organization-- NPO) and fulfill various difficult conditions. Small technical problems can spell the end of support. The most trivial excuse or problem is enough to allow a clerk of the Finance Ministry or the Registrar of Amutot to hold up the transfer of funds an organization is entitled to by law. If this happens, it becomes even more difficult to have the support approved.

"When the current government decided to put restrictions on amutot, only we made an outcry, whereas the secular public, which also benefits extensively from amutot, kept quiet. Why was this? The explanation for this is that our organizations receive all their money from the support funds via the amutot, whereas their organizations get their main support from the standard budget and the amutot only provide supplementary income. Any rules or legislation adversely affecting amutot has dire consequences for us, but far less for them."

To illustrate his point, Rav Gutterman cites the following example. "In all government ministries, the support funds form a marginal part of the Ministry's funds. The only exception is the Religious Affairs Ministry, where the support section takes up a large chunk of the ministry's budget. Why must we be dependent on the framework of support funds, with all this entails, even when it comes to funds from a ministry which is meant to serve us?" asks Rabbi Gutterman.

"Moreover," he adds, "the standard budget is automatically increased to take into account natural population increase, using a fixed formula, whereas the support funds remain constant, which means that every year we have to fight for increased funds due to our (blessed) natural expansion.

"It should be pointed out though," he adds, "that the decision to pass a regulation in the Budget Book and the formulation of criteria for budgeting, are dependent on three agents: the Ministry of Finance, the Minister in charge and the Attorney General. This also provides an answer to the accusations made against us last year. The Labor and Social Welfare Ministry's budget contained a regulation called `Assistance for Chareidi Boarding Schools' which contained an allocation of NIS 56.1 million. This regulation was cited by the Left as proof of sectorial budgeting in favor of the chareidi public. The defamers somehow `forgot' that secular boarding schools receive funding to the tune of approximately one billion NIS. However, these monies are paid out of the regular budget and not from support funds, and are therefore exempt from disclosure and publication in the Official Government Registry ("Reshumot") and are in fact not registered as a separate category anywhere.

"The same thing applies to other government ministries. In the record of a ministry's expenditure you will find a long list of chareidi institutions benefiting from the State's funds. It is these lists which the Left likes to wave in front of the media in order to besmirch the chareidi public. The truth is, however, that we actually receive less than all the others, only we receive our assistance from the support funds, details of which must be published in Reshumot where the name of the amuta beneficiary and the allocated sum appear, all within the framework of the duty of proper disclosure, whereas assistance to secular institutions which derive from the standard budget are mentioned only collectively, in general terms, within certain sections of the budget.

"At a meeting of the Knesset Finance Committee, held as a result of a report by Adv. Amnon de Hertoch from the Attorney General's office, it was demanded that the funding of chareidi boarding schools be abolished, since it was not egalitarian to have a sectorial funding for chareidim at the expense of other sectors. Our suggestion was simply to wipe out the word `chareidi' from the section dealing with boarding schools in the support funds. We agreed to this amendment confident that it would not have any negative effect on chareidi boarding schools, since secular ones receive about NIS 1587 a month per pupil from the standard budget in accordance with the decision of the Lior Committee, whereas the equivalent sum for chareidi boarding schools (received from the support funds) amounts to -- at best -- 450 NIS. No secular institution would want to be funded like us.

"On the one hand, the criteria formulated by the Finance Ministry, the Attorney General and the Social Welfare Ministry make it impossible for chareidi boarding schools to receive any funding; on the other hand, when a section is inserted whose purpose is to rectify the discrimination to a small degree, the claim is made that the section is non- egalitarian, thus depriving us even of that small minimum assistance."

(Writer's note: it would be interesting to hear Adv. de Hertoch's opinion of the Education Ministry's sectorial allocation to the Reform and Conservative movements.)

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