The National Budget and the Environment 2006

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The Jerusalem Institute for Israel Studies

The Center for Environmental Policy

Established by the Charles H. Revson Foundation

The National Budget

and

the Environment

Noga Levtzion-Nadan

2006



The Center for Environmental Policy Studies Series no. 22

The National Budget and the Environment

Noga Levtzion-Nadan

The opinions expressed in this document are solely those of the author.

This publication was made possible by funds granted

by the Charles H. Revson Foundation.

© 2006, The Jerusalem Institute for Israel Studies

The Hay Elyachar House20 Radak St. 92186 Jerusalem, Israel

http://www.jiis.org.il

E-mail: [email protected]



iii

Abstract, Findings, and Conclusions

This research project analyzes the national budget in terms of environmental issues

and presents some conclusions regarding the way in which different government

ministries are budgeted and the ways in which their budgets are utilized.

The research shows that the vote on the budget at the beginning of the year does

not reflect the activities of the government in the environmental arena, and that

discussion and change of the budget continue even after the voting ends. There is a

wide gap between the proposed budget and its execution, and if the budget is not fullyutilized, its goals are not met. The way in which the budget is constructed and presented

make both debate about it and follow-up on its implementation difficult (the budget is

the primary document detailing government plans). While the budget appears highly

detailed and transparent, technical problems and redundancies make it and its

significance difficult to comprehend. The Knesset (which approves the budget), the

general public, and bodies appointed by the government cannot understand the national

budget in a comprehensive or thorough way. The quantitative expression of the

government’s activities is thus essentially hidden from the public eye.

A. Findings1. The budget and its clauses are the technical, numerical expression of the

substantive problems in the areas of government authority and responsibility.

2. A rise in the level of the budget does not necessarily guarantee a rise in the level

of actual expenditure. The amount budgeted in 2001to environmental matters

was 18% higher than in 1996, but the real expenditure was actually 5% lower

(see graph no.1).

3. Statistics show the following trends (see table 2):

a. Both the budget and actual expenditure regarding water grew in real terms

since 1999.b. Both the budget and the actual expenditures grew for the prevention of air

pollution, environmental education, international relations, and other areas

of expenditure of the Ministry of Environmental Protection.

c. The budgets for drainage, disposal of solid waste, the preservation of

biological diversity, and the support of environmental organizations all grew,

but actual expenditure shrank.



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d. The budget for subsistence agriculture shrank, but the actual expenditure

grew.

e. Budgets were cut for the treatment of sewage, dangerous chemicals, support

for industry, the reduction of noise and radiation, and landscape protection —

and their real expenditure also shrank

4. The splitting of budgets and the division of authority among different ministries

do not allow for a broad view of a given field and confound attempts to formulate

coordinated policy. The fragmentation of administration increases costs and may

damage communal interests. The result: solutions that would have been less

expensive if there were a unified authority seem more expensive because of the

duplication of costs to the different bodies involved. In the case of water

management, for example, the distribution of authority among different regional

councils prevented the implementation of a unified policy and affected the

willingness of different sources to invest in solutions that would have been

unquestionably cheaper — such as improving sewage treatment — had there

been a single governing authority. Instead of clearly less expensive options, more

expensive ones have been chosen, such as desalination of sea water.

800

1,800

1,600

1,400

1,200

1,000

600

1996 1997 1998 1999 2000 2001

BudgetActual Expenditure

S u m i n M i l l i o n s o f I s r a e l i S h e k e l s

Graph 1: Environmental Budgets 1996-2001 — Budgets vs. Actual Expenditure

Budgeted Amounts Rose in Absolute Terms, Whereas Actual Expenditures Fell



v

T

able2:TotalEnvironmentalBud

getingOvertheYears—AccordingtoSubject

(In

thousandsofIsraelShekels)

Year

Typeof

Water&

Land

Treatm

ent

Protection

Protection

Advancing

Additional

Budget

Sewage

Preservation:

ofSewage

oftheAir,

ofBiological

Environment

Expenditures

Management

Drainage,

&Dangerous

Energy

Diversity&

Awareness

oftheMinistry

Agriculture,

Materials,

Treatment,

theLandscape

oftheEnvironment

&Quarries

&Indu

strial

Radiation,

Suppor

t

Noise,&

Environmental

Health

2001

Actual

352,906

90,303

56,96

2

28,717

204,917

163,048

82,270.2

Budget

795,579

112,225

106,36

8

53,189

275,325

176,350

102,347.9

2000

Actual

426,756

53,821

95,12

3

23,908

228,938

148,496

67,474.9

Budget

672,850

75,680

143,92

7

41,173

271,604

166,851

82,341.0

1999

Actual

383,722

68,512

75,34

1

15,799

229,312

157,177

59,205.1

Budget

626,527

77,964

121,26

3

34,430

281,892

167,051

70,083.5

1998

Actual

461,567

58,373

68,93

0

26,846

210,419

86,287

61,311.6

Budget

610,603

78,681

114,25

5

42,480

271,181

93,374

72,644.9

1997

Actual

405,483

66,633

50,21

0

36,996

207,653

75,892

57,608.3

Budget

550,644

100,016

96,69

4

53,265

238,849

82,089

66,669.7

1996

Actual

459,150

70,381

80,80

7

26,718

243,103

86,955

52,157.0

Budget

635,467

118,109

123,76

7

45,735

257,486

96,337

64,876.0

Source:ReportsonBudgetsandSpendingofGovernmentMinistries199

6-2001



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5. There is double-budgeting: several ministries budget the same activity (not as

partners in the same project), or similar functions are performed by the same

ministry. This wastefulness inhibits the maximizing of the budget.

6. New budget initiatives, changes in the conditions for support, and alterations in

the budget also adversely affect the use of the budgeted amounts.

7. The research shows that aid is better utilized (up to 80%) when directed at a wide

group of sectors (the Jewish sector, the Arab sector, etc.) than when directed to

projects of special authorities, even under positive conditions. The articulation

of clear and consistent criteria kept over a long period of time and open to a wide

range of sectors which promote the formation of a “critical mass” will improve

the use of the budget.

Graph 3: Total Expenditures of Government Ministries Versus Rate of Budget

Utilization

R a t e o f B u d g e t U t i l i z a t i o n

E x p e n d i t u r e

W a t e r

P r o j e

c t s

E n v i r

o n m e

n t

E d u c a t i

o n

I n t e r i

o r

A g r i c

u l t u r e

N a t i o

n a l I n

f r a s t r

u c t u r

e

N a t i o

n a l P

a r k s A

u t h o r i

t y

W a t e

r P r o j

e c t s, R

u n n i n

g C o s t

s H e

a l t h

G o v e r n m e n

t A c t i v i t i e s

i n t h e T

e r r i t o

r i e s

S u p p o r t

o f P u b l i

c P r o d

u c t s

I s r a e l

L a n d

A d m i

n i s t r a

t i o n

I n d u s t

r y a n d T

r a d e

S c i e n

c e a n d C

u l t u r e

R e l i g

i o n s

T r a n s p

o r t a t i

o n

P r i m e

M i n i

s t e r ' s

O f f i c

e

P u b l i

c E m e

r g e n c y S

p e n d i n g

Percentage of Budget Utilization

Total Expenditure

100

90

80

50

70

60

40

30

20

10

0

1,000

2,000

1,800

1,600

1,400

1,200

800

600

400

200

0



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8. Special budget clauses in different government ministries, which are out of

appropriate context, are not taken advantage of at all. There are also directives

for which the budgeting is far too low, and are therefore never implemented .

9. There are also a number of ministries which receive environmental budgeting

that have not been utilized for years.

10. Budgets allocated to regional councils and environmental groups are made use of

less than those allocated for activities.

11. There is a problem with the transfer of funds among different ministries for the

funding of joint environmental projects. The problem may be the result of the

lack of interest of the contributing ministry or the lack of follow-up by the ministry

that funded the project.

12. “Directed funds” that receive income from fines or duties on the basis of the

principle that “the polluter pays”, succeeded in increasing their income and

invested it in a useful way (for example, the Cleanliness Fund and the Fund for

the Prevention of Marine Pollution).

13. The pooling of resources and cooperation among ministries creates incentives

for organizations to act in these areas, to take advantage of available budgets, and

to overcome existing barriers.

14. Joint efforts by several ministries in different fields of specialty (training, support,and research) allow for a given issue to be dealt with in a thorough and positive

way.

15. There are a number of “technical” difficulties that infringe on the transparency of

the budget, both in the field of environment and in general:

a. there are budgeted “plans” that are not explained even in the detailed budget

proposals

b. due to “technical” failures, the names of particular programs and the standards

or regulations associated with them are not complete or clear. For example,

one program is given the headline “support for organizations for progress”,

but it is not possible to identify to what organizations or what kind of progress

is being referred.

c. There are a great number of slots, or clauses, for “activities”, the meanings

of which are not clear.

d. Wage costs sometimes appear in the department budgets themselves, but

usually they appear as part of the general management expenditures of the

ministry. It is therefore difficult to assess the cost of wages for these fields.



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16. Together with the investments in environmental budgets, the dominant approach

to budgeting is the traditional approach, which views development as a principal

goal, and therefore the largest budgets go to development.

B. Recommendations and Conclusions for Future Action

1. A single body should be designated as responsible for directing environmental

policy in the management of environmental budgets in each government ministry,

in order to expand and improve activity and to maximize the utilization of the

budgets.

2. In the fields of water and drainage, a wide and holistic view should be adopted, in

the framework of which the legal authority will coincide with budgetary authority

and improve decision making. Thus the unnecessary added costs of overlapping

responsibilities and divided authority will be eliminated, allowing for better and

more rational policies.

3. The directive of regional councils, environmental organizations, and entrepreneurs

is important, as is the education and provision of information to them about

environmental issues. Assistance is also needed in solving organizational

problems, in finding sources of funding, and in the development of plans. These

services are particularly important in the sectors that have not taken advantage of

projects offered them in the past — such as the Bedouin of the Negev.

4. The Department of Finance should be encouraged to expand the range of issues

covered by the “directed funds”, for which income is dependent on expenditure

(such as the Cleanliness Fund and the Fund for the Prevention of Marine Pollution)

in order to guarantee enforcement of “the polluter pays” principle and the

improvement of the state of the environment — without depending on the national

budget or minimal government contributions.

5. Methods should be adopted which optimize the use of the budget:

a. a multi-annual plan should be prepared to deal with complicated issues,together with a multi-annual budget, appropriate preparations and guidance,

in order to ensure efficient use of financial resources and existing government

legislation.

b. persistent efforts should be made to define budgetary plans. If the need

arises to make alterations in the budget or to initiate new programs, change

should be made gradually and in keeping with the funding and assistance



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provided by the relevant bodies — preferably, as early in the process as

possible.

c. the attainment of concentrated budgets, with clear, stable criteria over a

period of time, should be a goal. Such budgets facilitate the formation of a

“critical mass” which in turn are more likely to result in better and fuller

utilization of funds.

d. special functions for particular sectors should be concentrated in order to

prevent the waste resulting from double-budgeting.

e. efforts should be made to eliminate and prevent overlapping and duplication

of similar or identical posts within different departments of one ministry or

in different ministries.f. small budgets in a given ministry should be consolidated into larger budgets

to increase their effectiveness.

6. It is important to improve the transparency of the budget and to avoid “technical”

vagueness:

a. it is important that budget proposals include detailed explanations of the

plans budgeted, including definitions of proposed posts.

b. plans and posts should be given clear names so that their purpose and role be

easily understood.

c. the number of posts associated with the general title of “activities” should be

limited and greater clarification should be given as to the intentions andexecution of the given role

d. distinction should be made between wages and activities.

Discussion of environmental budgeting can not only raise awareness but bring about

wiser and more effective spending. This research is designed to be a tool in promoting

these goals, to be employed both by the government and governmental bodies and by

environmental organizations. Appropriate use of its findings can improve the state of

the environment in Israel.

The National Budget and the Environment 2006

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