Almost 30% of all west Bank settlers are now haredi, and their disproportionate (and most often self-imposed) poverty forces Israel's government to disproportionately subsidize the settlement towns they live in.
According to Ynet, the Government of Israel spent more money per capita on Jewish West Bank settlements that it does on development towns within Israel proper. The government gave $83 per capita to the average Israeli town, $168 per capita for development towns (poor, often remote towns within Israel proper that the government is trying to turn into strong regional centers), and $260 per capita for settlements on the West Bank and Golan Heights in what are called balance grants, which are blocks of money given by the central government to cities and towns to help them balance their budgets.
Why do settlements get more money than every other town?
Because settlements take in much less per person in taxes than do other cities and towns.
Why is that?
In part, it is because many West Bank settlers are economic refugees from Israel proper who moved to the West Bank for its cheaper cost of living.
It stands to reason that a disproportionate number of those settlers will earn less money than an equally educated inside Israel cohort of the same age and ethnic origin.
But there is another factor that is even more determinative of the need for what essentially is welfare payments to cities and towns – haredim.
About 30% of the population of Jewish West Bank settlements are now haredi, and as you know, many haredim choose not to work and many pay no taxes – even when they do have jobs:
…The independent income of local authorities in the territories in 2009 stood at NIS 2,523 ($690) per capita, less than half the income per capita in cities belonging to the "15 well-established cities" forum, which do not receive any balancing grants and fund all services from their income.
Rise in haredi cities' population
The large gaps in the local authorities' income also stem from their residents' socioeconomic status, but also from the scope of aid they receive from the government, which makes it unnecessary to collect taxes and impose fees and fines.
The low income of local authorities in the settlements can be ascribed to the increasing growth in the population of the ultra-Orthodox cities, Modiin Illit and Beitar Illit, whose population made up 28% of the settler population at the end of 2009.…
Yes, aid from the central government does make it easier for settlement towns to not collect taxes, fees and fines.
But 28% of all West Bank settlers are predisposed not to pay taxes while at the same time being a large draw on local welfare resources – haredim.