Adalah Petitions the Supreme Court to Reject the Discriminatory Criteria Used to Determine Distribution of Balance Grants to Local Authorities

Today, Adalah filed a petition on behalf of the National Committee of Arab Mayors, the Municipality of Nazareth and in its own name against the Ministry of the Interior (MOI), the Ministry of Finance (MOF) and the Prime Minister, demanding that the government reject the criteria currently applied by the MOI to determine distribution of balance grants on the grounds that the criteria discriminate against Arab local authorities. Balance grants are monetary allotments distributed annually to assist local authorities to balance their budget. Furthermore, the petitioners call for the implementation of objective, equal and unified criteria for distributing these grants.

Adalah Staff Attorney Jamil Dakwar filed the petition after discovering that the Committee established in early 2000 in order to re-assess the formula used to determine the distribution of balance grants has still not completed its work. Consequently, the MOI continues to distribute grants based on an arbitrary and discriminatory policy in contradiction with the recommendations made in the State Comptroller’s Report 2000. This policy also contradicts the Swari Report, approved by the government in 1993, which recommends the distribution of balance grants based on the principle of equality. 

The petitioners argue that the MOI has calculated the distribution of balance grants in recent years based on an unsound system of socio-economic ranking of local authorities. The ranking system incorporates the percentage of Jewish immigrants absorbed by a local authority, which disadvantages Arab local authorities, which do not absorb new Jewish immigrants.

As a result, the socio-economic ranking negatively impacts the projected budget of the Arab local authorities by artificially raising their projected income. The petitioners argue that the MOI also reduces the projected public expenditures of the Arab local authorities in a discriminatory manner when calculating their balance grants. Furthermore, the ranking system favors the Jewish local authorities based on their position on the“national priority areas map,” thus constituting further discrimination against Arab local authorities, most of which are excluded from this classification and these benefits.

The petition states, “The situation has led to a significant reduction in the amount of balance grant allotments provided to Arab local authorities, in spite of the economic crises suffered by Arab local authorities for many years … the means used to calculate the allotments by the MOI creates a vicious cycle of budget gaps and unequal grant distributions. The increased budgets assigned to the Arab local authorities by signed agreements in the past decade balance out with the unequal distribution of balance grants, which had been designed to support the weaker local authorities, most of which are Arab.”

In addition, the petitioners argued that the MOI and the MOF broke agreements and promises which they had given to end discrimination in budget distributions generally, and in balance grants specifically.  According to the petitioners: “The current means of balance grant distribution lacks an equitable criteria. Moreover, it is incompatible with both the law and the principles recommended by the Swari Committee. It breaks agreements which the Arab local authorities and the respondents have signed during the past decade. According to these agreements, the respondents have committed themselves to closing the gaps and abolishing discrimination against the Arab local authorities.” 

The petitioners ask the Supreme Court to compel the MOI to implement the recommendations of the Swari Committee. The Committee recommended that the means of calculating the balance grant consider the necessary public expenditures required by every local authority in order to provide its citizens with at least a minimum of required services; the income of the local authority; and the socio-economic ranking of the authority’s citizens according to the Central Bureau of Statistics.

In addition, the petitioners seek an injunction preventing the government from finalizing any decisions regarding the distribution of balance grants to local authorities for 2002 on the grounds that: “The perpetuation of the current situation causes and will continue to cause much damage to the Arab local authorities, which may hinder the daily functioning of the authorities; above all, it may hinder the duty of these authorities from providing the basic services required by their citizens.”

H.C. 6223/01, National Committee of Arab Mayors, et. al. v. Ministry of the Interior, et. al.