The mass resignation of mayors and city council chairmen of all Israeli municipalities was averted yesterday but their dispute with the government continued. The city officials threatened to resign in protest against the government’s demand that they refrain from raising local taxes. The municipalities need about $18 million in additional revenue. The government feared that a tax rise would jeopardize its efforts to keep wages as low as possible in the wake of a general price increase.
The government proposed that the municipalities adopt interim budgets for three months during which time it was hoped that other sources of revenue could be found. The mayors decided against a mass resignation but refused to prepare interim budgets. They said they would wait two months for the results of talks between the government, labor and management on wages and taxes.
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