Municipal financing of primary school education
Summary of an article in the forthcoming issue of "Recent Economic Developments", that describes the scope of independent sources that the municipalities allocate for teachers' work hours in the 2001-2009 school years.
During 2001-2009 local municipalities financed an average of 1.5 weekly teacher work hours per class in the regular official primary school tracks. This number reflects just 2.5 percent of the total hours per week, and some 25 percent of the hours not financed by the Ministry of Education.
Municipalities in areas of higher socio-economic status contributed in Hebrew education many more hours of financing than municipalities in Arab education or lower socio-economic areas, most of which are Arab.
If only the hours that the Ministry of Education finances are taken into account, then the scope of affirmative action in primary education in the Hebrew-State education system, benefiting students from weaker socio-economic backgrounds, stands at 32 percent. This rate falls to 27 percent when taking into account hours that are financed by the municipalities, because well funded municipalities allocate many more resources to the primary schools than less well funded municipalities, and notwithstanding the fact that the wealthier municipalities conduct a significant affirmative action policy within their jurisdictions to benefit schools whose students come from weaker socio-economic backgrounds—an additional 2-3 weekly hours per class.
The Central government would like to reduce the gaps between populations and between geographic regions. As such, it generally conducts a policy of affirmative action (a progressive policy) in budgeting for education, benefiting students from weaker socio-economic backgrounds and from the geographic periphery of the country. On the other hand, local government widens the gaps in education, (a regressive policy), since those municipalities with greater fiscal strength can allocate many more resources to the education system in their jurisdictions than the weaker municipalities. The residents of those stronger municipalities, which are generally characterized by a stronger socio-economic background, benefit from these additional resources.
This phenomenon is part of the growing involvement of the private sector in financing and providing services, including educational services. In particular, economic, social and political processes have led to growing competition between the municipalities over the basket of services provided to residents, mainly in order to attract stronger populations that are marked by their readiness and ability to finance more quality services through higher municipal taxes.
Earlier articles give the impression—which has gained traction in public opinion—that the scope of resources that the stronger municipalities have allocated to the education system has turned the situation on its head and cancelled out the Ministry of Education's affirmative action policy. However, as we will see below, this is not the case, at least in relation to the work hours of primary school teachers.
Following is an overview of the scope of independent sources that the municipalities allocate for teachers' work hours. The outline focuses on regular (not special education) official (not ultra-Orthodox) primary schools, mainly in the Hebrew-State educational system, in the 2000/2001 (5761) and 2008/2009 (5769) school years. It relies on the "standard audit", which reviews a sample of one-fifth of the schools and is conducted for the Ministry of Education.
During 2001-2009 the municipalities financed an average of 1.5 weekly work hours per class in the regular official primary school tracks. This number reflects just 2.5 percent of the total hours, and some 25 percent of the hours not financed by the Ministry of Education.
Municipalities from areas of higher socio-economic status—which contain mainly schools whose students come from strong backgrounds—participated more in the financing of work hours than municipalities from areas of lower status (Figure 1). Arab municipalities, most of which are poor, provided almost no financing for hours.
Figure 1. Teaching hours financed by the municipality in primary schools1, by educational stream and socio-economic grouping of the municipality2,
2001-2009 average (weekly hours per class)
SOURCE: Bank of Israel (2011), Annual Report 2010, Chapter 8.
1) Regular official primary schools containing Grades 1-6 only.
2) The socio-economic grouping of the municipality in 2006. Low – the 1st-3rd groupings; intermediate – the 4th-7th groupings; high – the 8th-10th groupings. There are very few schools in the Hebrew-State education system in municipalities from the low groupings. There are few schools in the Arab education system (Bedouin and Arab sectors, including Druze and Circassian) in municipalities from high groupings, and the same is true in the Bedouin sector in municipalities from intermediate groupings.
Therefore, if only the hours that the Ministry of Education finances are taken into account, the scope of affirmative action to benefit students from weaker backgrounds stands at 32 percent. This falls to 27 percent when we also take into account the allocation of hours by the municipality. The regressiveness of the municipalities in financing teachers' work hours is a result of the positive correlations between the municipality's fiscal strength, the socio-economic background of the students in its jurisdiction, and the scope of resources that it allocates to education.
This regressiveness exists even though municipalities in high-level groupings do conduct affirmative action policies to benefit Hebrew-State schools whose students come from intermediate socio-economic backgrounds rather than stronger ones (figure 2).
We note that during the period studied, there were no significant changes in the scope of hours that the municipalities allocated to Hebrew-State schools by the socio-economic backgrounds of the students and/or the municipality.
Figure 2. Teaching hours financed by the municipality in Hebrew-State primary schools1, by socio-economic background of the municipality2
and the school's students3, 2001-2009 average (weekly hours per class)
SOURCE: "IDEA – Economic Management and Consulting, Ltd.", Central Bureau of Statistics (2009), and Bank of Israel analysis.
1) Regular official primary schools containing Grades 1-6 only.
2) The socio-economic grouping of the municipality in 2006. Intermediate – the 4th-7th groupings; high – the 8th-10th groupings. There are few schools in the Hebrew-State education system in municipalities from the low groupings, and few schools whose students come from a weak socio-economic background in municipalities in high groupings. Therefore, information regarding these groups is not presented in the figure.
3) Weak background – the 8th-10th nurture deciles; intermediate background – the 4th-7th nurture deciles; strong background – the 1st-3rd nurture deciles.
In summation, the municipalities have reduced the scope of affirmative action in allocating resources to education, since the stronger municipalities have made many more resources available to the Hebrew-State primary schools in their jurisdictions than the weaker municipalities, and since the affirmative action policies in their jurisdictions are limited. At the same time, the scope of resources that the stronger municipalities allocated was not large enough to overturn the Ministry of Education's affirmative action policy.
 Not including support staff (secretaries, maintenance workers, and so forth). The analysis also does not deal with expenses for activities outside of the study program, purchasing, construction and so forth. But this does not pose a significant difficulty, since teaching hours are the core of education, and salary expenses account for a significant majority of total education expenses.
 For explanations of the "standard audit", see N. Blass, S. Tsur , and N. Zussman (2010), The Allocation of Teachers' Working Hours in Primary Education , 2001–2009, Bank of Israel, Research Department, Discussion Paper Series 2010.18, Jerusalem.
 An analysis of the gaps in the level of sources that do not come from the municipalities, by education stream and socio-economic background of the students, can be found in Blass et al. (2010), and Bank of Israel (2011).