Billions for Settlements in the 2024 Budget

Initial Analysis of the Proposed 2024 Budget

Settlement Watch, Peace Now[1], February 2024

In the coming days, the Knesset is expected to approve the state budget for 2024. The budget draft, not fully detailed, was approved by the government after lengthy discussions on January 15, 2024. While billions are being cut from education, welfare, higher education, and the Arab population in Israel, the government is increasing budgets for ultra-Orthodox, the religious-national sector, and settlements.

Since the budget draft lacks specificity, it is challenging to determine exactly how much money is allocated exclusively to settlements. However, based on the available information, it appears that:

Main Findings:

1. 1. Coalition funds: Disguised as cuts, along with year-end additions, about 390 million shekels have been added to settlements. In 2024, coalition funds for settlements will amount to over 737 million shekels (instead of the originally allocated 275 million shekels in the government’s decision from May 2023).

1. 2. Unique government decisions for settlements: Due to the war, the government decided on a broad 15% cut from budgets for governmental plans decided by a unique government decision. Most of these cuts are in plans to assist the Arab society in Israel (an estimated 85% of the cut will be from programs for the Arab society, totaling around 4.5 billion shekels). In unique settlement plans, after the cut, about 409 million shekels were allocated for the coming years (about half of them for 2024). This includes the restoration of the Sebastia Park, projects related to the Elad Association in Palestinian neighborhoods in East Jerusalem, a plan to strengthen the Old City Basin, and the preservation of antiquities in the West Bank. The government did not cut the 20 million shekels designated for support to agricultural farms, many of them are illegal farms in the West Bank.

1. 3. Roads development in settlements: After the cut, around 3.6 billion shekels (about 20% of Israel’s roads development expenses) will be allocated for roads for settlements in the West Bank.

1. 4. Special grants to local authorities in settlements: In addition to about 160 million shekels from coalition funds designated for special grants to local authorities in settlements in 2024, there are also special grants in the budget plan. In 2023, these grants stood at about 15 million shekels, but during the year, they increased elevenfold, and in practice, over 175 million shekels were allocated to local authorities from these specific items. According to the Budget Key website, the unique grants for 2024 in the budget plan amount to 12 million shekels.

4. 5. Additional funds:
   • – Establishment of a “Heritage Center” at the Sebastia train station – 3.5 million shekels;
   • – Hirbet Aqed (archeologic site) development – 12.25 million shekels;
   • – Budget for the Civil Administration’s Supervision Unit (which mainly enforces against Palestinians) – 37.9 million shekels;
   • – Development of the Hasmonean Palaces site, Judean Desert caves survey, and digitization project at the Antiquities Authority – 12 million shekels;
   • – Compensation for settler exporters (compensation for not receiving the same conditions as Israeli goods in the European Union) – 13 million shekels;
   • – Security for about 3,000 settlers in Palestinian neighborhoods in East Jerusalem – about 110 million shekels (estimate based on 2023 performance).

It is essential to note that all these funds are only a small part of the funds allocated for settlement development. Many additional funds do not appear as specific items for a particular region, making it impossible to determine in advance how much will go to settlements and how much for the rest of the country. Also, this budget does not include ongoing budgets for maintaining all settlements, and, of course, not the heavy cost of security and protection for hundreds of thousands of settlers scattered throughout the Palestinian territories in the West Bank.

Details

1. 1. Coalition Funds:

Coalition funds are budget allocations that are based on political agreements between the parties that form the coalition in Israel. Through those funds, the government gets to support specific groups and sectors while avoiding the need for equal allocations and fair criteria.

Shortly after the formation of the government, a decision was made to allocate approximately 8 billion shekels in each of the years 2023 and 2024 for various purposes that the government deems essential, primarily directed towards the ultra-Orthodox and the national-religious sector. Among these coalition funds, about 620 million shekels (approximately 310 million shekels in each of the years 2023 and 2024) were designated exclusively for settlements.

Following the outbreak of the war and the need for extensive cutbacks, the government decided to cut the coalition funds in 2024, reducing them to approximately 5.7 billion shekels. While there seems to be a cut of around 140 million shekels in the coalition funds for settlements, the government simultaneously added new clauses, some of which were allocated for the year 2023, totaling 530 million shekels for settlements. The allocation of funds at the end of December 2023 is essentially an allocation that will take place in 2024. Therefore, the total amount of coalition funds for settlements designated for the year 2024 stands at 737 million shekels.

* The Addition of 200 million shekels for the Settlement Division was brought for approval of the Finance Committee of the Knesset as a budget change and is not reflected in the Coalition Funds list approved by the government. It is worth mentioning that some of the budget of the Settlement Division is intended for localities within Israel.

2. 2. Unique Government Decisions for Projects in Settlements

During 2023, the government decided to allocate some 668,650,000 shekels in years 2023-2027 for projects to encourage tourist settlements in the West Bank and East Jerusalem. Some 250,750,000 shekels of it were allocated for 2023.

The projects include the Strengthening of the Old City Basin Plan, and the Shalem Plan which together are changing dramatically the character of Jerusalem, from a city of three religions and of two peoples, to a Jewish city in which any other presence is marginalized.

Due to the war, the government decided on broad cuts of 15% in 24 governmental plans, including the projects for touristic settlements. However, according to the estimation of the National Committee for the Heads of Arab Local Authorities in Israel, 85% of the cut is in plans for the Arab population, while other plans that were included in the cut are much smaller. Despite the cut, some 409,215,000 shekels remain for the projects in settlements in the coming years, with about half (203,260,000 shekels) allocated for 2024.

* The support to volunteers in agriculture was not included in the cuts. This concerns funds intended for associations providing volunteers to agricultural farms nationwide. A significant portion of these volunteers are sent to illegal farm outposts in the West Bank designated for distancing and expelling Palestinians from their surroundings (according to Peace Now’s estimation 40% of the funds go to West Bank farm outposts).

3. 3. Transportation and Roads – 3.6 Billion Shekels for Roads in Settlements

Shortly after the formation of the government, an agreement was reached between the Ministry of Finance and the Ministry of Transportation on a strategic plan for roads for five years (2023 to 2027). Approximately 24% of the road development budget was intended for roads in settlements. Due to the war and towards the approval of the budget for 2024, on January 15, 2024, the government decided to cut 2.736 billion shekels from the development budget of the Ministry of Transportation nationwide for the years 2024-2027. The government’s decision does not specify which roads will be cut, but the draft decision presented for discussion by the government proposed that even after the cut, the government would invest 3.610 billion shekels in roads in settlements, constituting about 20% of Israel’s investment in roads.

Roads are key to the development of settlements, and massive road construction could lead to an increase in the number of settlers in the coming years.

* PTEF – Projects toward the End of the Five Years – The budget for the PTEF is an estimation according to a total sum of 250 Million for 13 projects which 12 of them are in settlements.

** The budget for American Rd. was allocated for the year 2023.

4. 4. Special Grants for Local Authorities in Settlements

One of the main ways the government funds settlements is through grants to settlements local authorities in the West Bank. In addition to Balancing Grants given to all local authorities in the country based on criteria, the government annually grants unique grants to settlements. For example, following the Oslo Agreement, the government decided at the time to give settlers an “Oslo Grant,” and this grant has been given every year since (in 2023, it stood at about 18 million shekels).

It is difficult to know in advance how much money will be allocated to those special grants. In the budget plan each year, only part of the unique grants for settlements appear, but at the end of the year, it turns out that expenses and grants were much higher. For example, in the budget plan for 2023, no money was allocated for a “One-Time Security Grant to Local Authorities in Judea and Samaria,” but eventually, 77.6 million shekels were given. The Oslo Grant stood at 1.2 million in the budget plan but was distributed as 17.7 million in reality.

Some of the special grants appear in the Coalition Funds or unique government decisions. Below is partial information on the grants (from the Budget Key website).

[1]  Thanks to The Berl Katznelson Center for making many parts of the budget accessible.