Innovative Solutions to the Municipality of Jerusalem’s Fiscal Problem
The Municipality of Jerusalem operates under a rapidly growing operating budget deficit, which in 2019 reached 950 million shekels. The deficit is currently being financed by a central government balancing/capital city grant. Given the planned central government budget cuts for the years ahead, this financing source cannot be relied upon in the future. This is not a problem exclusive to Jerusalem. Only 12% of local governments in Israel operate under a balanced budget without a balancing grant. This research will examine how we got to this unsustainable situation and will offer a number of innovative fiscal mechanisms that the municipality can add to its revenue tool box.