As of late 1988, there were two levels of local government: the central government operated the upper or district level; citizens elected the lower and relatively autonomous municipal level officials. The system of district administration and local government was for the most part based on statutes first promulgated during the Ottoman era and perpetuated under the British Mandate for Palestine and under Yishuv policies. Since independence it has been modified to deal with changing needs and to foster local self-rule. As of late 1988, local government institutions had limited powers, experienced financial difficulties, and depended to a great extent on national ministries; they were, nevertheless, important in the political framework.
Israel consisted of six administrative districts and fourteen subdistricts under, respectively, district commissioners and district officers. The minister of interior appointed these officials, who were responsible to him for implementing legislative and administrative matters. District officials drafted local government legislation, approved and controlled local tax rates and budgets, reviewed and approved by-laws and ordinances passed by locally elected councils, approved local public works projects, and decided on grants and loans to local governments. In their activities, local officials were also accountable to the Office of the State Comptroller. Staff of other ministries might be placed by the minister of interior under the general supervision of district commissioners.
Israel's local self-government derived its authority from the by-laws and ordinances enacted by elected municipal, local, and regional councils and approved by the minister of interior. Up to and including the municipal elections of 1973, mayors and members of the municipal councils were elected by universal, secret, direct, and proportional balloting for party lists in the same manner as Knesset members. Council members in turn chose mayors and municipal council chairpersons. After 1978 mayoral candidates were elected directly by voters in a specific municipality, while members of municipal and local councils continued to be elected according to the performance of party lists and on the basis of proportional representation.
Population determined the size of municipal and local councils. Large urban areas were classified as municipalities and had municipal councils. Local councils were designated class "A" (larger) or class "B" (smaller), depending on the number of inhabitants in villages or settlements. Regional councils consisted of elected delegates from settlements according to their size. Such councils dealt mainly with the needs of cooperative settlements, including kibbutzim and moshavim. The extensive local government powers of the minister of interior included authority to dissolve municipal councils; district commissioners had the same power with regard to local councils.
Local authorities had responsibility for providing public services in areas such as education, health care and sanitation, water management, road maintenance, parks and recreation, and fire brigades. They also levied and collected local taxes, especially property taxes, and other fees. Given the paucity of locally raised tax revenues, most local authorities depended heavily on grants and loans from the national Treasury. The Ministry of Education and Culture, however, made most of the important decisions regarding education, such as budgets, curriculum, and the hiring, training, and licensing of teachers. Nationwide, in 1986 local authorities contributed approximately 50 percent to financing local budgets. In 1979 the figure was about 29 percent. Over the years, municipalities have relied on two other methods for raising funds: cities such as Jerusalem, Tel Aviv, and Haifa used special municipal endowment funds, particularly for cultural purposes; and Project Renewal, a collaboration among local authorities, government ministries, and the Jewish Agency provided funds to rehabilitate deteriorated neighborhoods.
Local government employees came under the Local Authorities Order (Employment Service) of 1962. The statutes pertaining to the national Civil Service Commission did not cover them.
The Local Government Center, a voluntary association of major cities and local councils, was originally established in 1936, and reorganized in 1956. It represented the interests of local governing bodies vis-à-vis the central authorities, government ministries, and Knesset committees. It also represented local authorities in wage negotiations and signed relevant agreements together with the Histadrut and the government. The center organized conferences and advisory commissions to study professional, budgetary, and managerial issues, and it participated in various national commissions.
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