Interior Ministry Local Government Report: 65% of Municipalities Located in the Periphery

The Interior Ministry's 2026 local government report reveals economic and social gaps among Israeli municipalities. 65% of municipalities are in the periphery, and 77 cities concentrate about 75% of the population. Only 38% of municipalities are defined as financially stable, and 14% are in recovery plans. Gaps in business property tax between large and peripheral municipalities are prominent, with Nazareth leading in a deficit of 330 million shekels.

The Interior Ministry's 2026 local government report, published last week, presents a broad picture of 259 local municipalities in Israel. The report shows that 65% of municipalities are located in the periphery, and only 77 cities concentrate about 75% of the country's population. In the Tel Aviv district, about 1.5 million residents live in 12 municipalities, while in the Northern district a similar number of residents is spread across 94 municipalities. Financially, only 38% of municipalities (about 98) are defined as stable and solid, 31% (about 80) are in an intermediate state, 17% (about 44) are in recovery or efficiency plans, and 14% (about 37) are in other categories. The balancing grant for 2025 reached 3.6 billion shekels and was distributed among 195 municipalities. In 2024, 65 municipalities operated with an accompanying accountant, of which 85% were from the Arab and Druze society. The gaps in business property tax are prominent: in the nine largest municipalities, all Jewish or mixed, business property tax constitutes an average of 24.1% of revenues, compared to 5.5% in peripheral municipalities with a low socio-economic rating. The Tamar Regional Council leads with 70.5% of revenues from business property tax, while Neve Midbar is at the bottom with 0.1%. The average annual property tax per square meter is 68 shekels in large municipalities and 39 shekels in peripheral ones. Nazareth recorded the highest deficit in 2024 – 330 million shekels. The debt burden per household is high in Tuba-Zangariyye (37 thousand shekels) and in Beit El (36 thousand), while Tamar enjoys a surplus of 13 thousand shekels. Only 5.6% of municipalities are managed by women, and 21.4% of council members are women, with particularly low rates in low socio-economic clusters.