Arrangements in the State Economy Law (Legislative Amendments for Achieving the Budget Targets) (Amendment – Calculation of Municipal Property Tax Increases) Bill

What does the bill do?

The proposal changes the calculation formula for updating arnona rates that was set in the State Economy Arrangements Law of 1992. Today, the update of the rates is calculated as an average of changes in the Consumer Price Index and the public-sector wage index; the proposal proposes that the update be based on the Consumer Price Index only. The rationale given is that the current formula has led to sharp increases in arnona rates that exceed the actual rate of inflation, and therefore, to ease the burden on residents and business owners, the link to public-sector wages must be severed.