Bnei Brak is facing a deepening financial crisis after accumulating a deficit of approximately NIS 130 million, prompting Israel’s Interior Ministry to impose immediate restrictions on the municipality and consider appointing an outside accountant to oversee its finances.
The startling deterioration has raised questions about how one of Israel’s largest municipalities — with an annual budget of roughly NIS 2.5 billion and substantial property-tax revenue from its booming commercial district — found itself approaching the limits of its available credit and struggling with cash flow. The deficit includes approximately NIS 80 million recorded in 2025 and another roughly NIS 50 million accumulated during 2026.
The Interior Ministry has now frozen municipal requests for personal employment contracts and salary upgrades and will approve only essential special-budget projects. Bnei Brak Mayor Chanoch Zeibert has also been ordered to present an emergency recovery plan by October 11 detailing how the municipality intends to return to a balanced budget by the end of the year.
The warning came from Tzvika Einbinder, the Interior Ministry official overseeing the Tel Aviv District, who demanded significant spending reductions and other immediate measures.
“I am asking you [Zeibert] to have the municipal administration convene as soon as possible and make binding and painful decisions,” Einbinder wrote. “The plan must include concrete steps to reduce the deficit and return to a balanced budget by the end of the year in the areas of procurement, tenders and municipal personnel.”
Should Bnei Brak fail to stabilize its finances, the Interior Ministry is considering appointing an accompanying accountant, a step that would sharply curtail the municipality’s financial independence. Such an official can be given authority over expenditures, payments to suppliers, hiring, employee compensation and, in some circumstances, municipal tax collection and debt payments.
The financial collapse is particularly striking because Bnei Brak has a major commercial tax base. The city receives hundreds of millions of shekels in revenue from office properties, including the large BBC business district, and its annual municipal budget stands at approximately NIS 2.5 billion. Moreover, the city received an increase of roughly NIS 20 million in its government balancing grant in 2025 following a technical change to the funding formula.
Aharon Rabinowitz, the Chareidi affairs correspondent for Haaretz, said in an interview with Radio 103FM that those numbers make the municipality’s financial predicament especially difficult to understand.
“How did this happen? How did we get to this situation? I asked that. The Bnei Brak Municipality is one of the largest municipalities in Israel, mainly because of the office towers that bring enormous arnona revenues into the municipality,” Rabinowitz said.
Rabinowitz leveled particularly sharp criticism at Zeibert, who returned to the mayor’s office in 2024 and also serves as secretary-general of Agudas Yisrael.
“The mayor is almost never in Israel, he is most of the time on flights abroad and nobody really knows; he is one of the senior figures in the Ger chassidus,” Rabinowitz said.
He also alleged that the municipality has failed to provide an adequate accounting of its spending.
“The municipality is engaging in completely reckless spending; we don’t know where the money ultimately goes,” he said.
According to a Calcalist report, some officials within the municipality have similarly blamed Zeibert for the crisis, alleging that he has not demonstrated command of the financial details or produced a clear plan for reversing the deterioration. The mayor did not respond to Calcalist’s request for comment.
The cash-flow crunch has already forced the city to take extraordinary steps. According to the report, the municipality sold a securities portfolio worth approximately NIS 30 million, eliminating what had served as a financial cushion. The city has also been delaying payments to suppliers as it contends with its liquidity problems.
Municipal officials, however, are pushing back against the suggestion that irresponsible spending alone created the crisis. They contend that decisions and delays by the Interior Ministry have deprived Bnei Brak of tens of millions of shekels in anticipated revenue.
One major dispute involves approximately 12,000 households that applied for arnona discounts. City officials say the Interior Ministry has yet to approve those applications, leaving the municipality unable to collect the disputed taxes and creating a revenue hole they estimate at roughly NIS 30 million.
Officials also say the Interior Ministry has not approved municipal bylaws that could generate additional revenue. Among the proposals is an increase in parking rates that the municipality estimates could bring in another NIS 15 million annually. In addition, city officials say Education Ministry directives forced Bnei Brak to increase payments to educational aides by approximately NIS 25 million.
Those explanations, however, do not fully account for the severity of the municipality’s predicament, according to the Calcalist report. Other municipalities face similar government delays and expenses without experiencing a financial crisis of Bnei Brak’s magnitude, while the city continues to benefit from billions of shekels in annual revenue and a lucrative commercial property-tax base.
The municipality has publicly maintained that it can turn the situation around. In response to the Interior Ministry’s warning last week, Bnei Brak officials said they expect to finish the year with a balanced budget.
For now, however, the Interior Ministry is demanding more than assurances. Unless the municipality produces a credible recovery plan and dramatically improves its financial position, Bnei Brak could find its budgetary decisions placed under outside supervision — an extraordinary development for one of Israel’s largest and most prominent Chareidi cities.
{Matzav.com}