Supreme Court Justice Alex Stein froze approximately NIS 270 million (roughly $85 million) in education funding approved by the Knesset Finance Committee on Tuesday, citing procedural defects in the committee's convening during the national election recess.
The temporary freeze order, issued Wednesday morning, halts transfers intended for Haredi educational institutions, teacher salaries, student transportation, and welfare programs. The decision reignited intense debate over judicial authority, coalition governance, and state funding of religious education systems that do not teach Israel's mandatory core curriculum.
Procedural Challenge
The Hiddush religious-freedom organization and Democratic party MK Naama Lazimi filed petitions Tuesday morning after Finance Committee chairman Likud MK Hanoch Milwidsky did not cancel the meeting in response to a warning letter sent by the petitioners. The petition initially challenged proposed transfers totaling more than NIS 360 million, including approximately NIS 280 million that the petitioners said was intended for Haredi and religious educational institutions.
In his order, Justice Stein stated that in light of "apparent procedural flaws" in the Finance Committee's convening on August 4, 2026, an interim order was issued "restraining the implementation of the budget transfers decided in the course of that discussion, except for a transfer pertaining to civil emergency expenses."
Stein ordered respondents, including the Finance Ministry and Religious Services Ministry, to file preliminary responses within 48 hours.
Core Curriculum Dispute
Opposition lawmakers sharply criticized the transfer, with a key point of contention being the allocation of funds to Haredi institutions that often do not teach mandatory core curriculum subjects. Despite the long-running issues with the Haredi education system, Prime Minister Benjamin Netanyahu's government has repeatedly boosted its funding, with the 2026 state budget increasing allocations to Haredi educational institutions by more than NIS 1 billion, from NIS 4.1 billion ($1.3 billion) to NIS 5.17 billion ($1.65 billion).
Finance Committee member Yesh Atid MK Vladimir Beliak stated after the transfers that the government had "sold out Israelis who work and serve to Gafni and [Shas Party leader Arye] Deri." "They simply took your money, your children's money—hundreds of millions of shekels, and transferred it to draft dodgers," he added.
Provisions Frozen
Among the provisions in the frozen budget package was a historic provision establishing full budgetary parity for Haredi daycare teachers and kindergarten teachers with the general education sector for the first time since Israel's founding. The budget also included allocations for student transportation, afternoon programs, and teacher training initiatives in Haredi seminaries.
The Finance Committee approved the transfers under the leadership of Degel Hatorah party MK Moshe Gafni, who heads both the committee and the ultra-Orthodox party. Gafni stated that the approved budgets addressed longstanding funding gaps in Haredi education and welfare systems.
Coalition Response
Coalition lawmakers slammed the High Court of Justice after it froze the transfer of hundreds of millions of shekels in budgetary allocations made by the Knesset Finance Committee to ultra-Orthodox schools.
"Yesterday Judge Sohlberg and today Judge Stein. Both entered the Supreme Court as 'conservatives.' The High Court of Justice is beyond repair. The High Court of Justice needs to be closed down; the solution is a Constitutional Court," posts Knesset Finance Committee chairman Hanoch Milwidsky on X.
Coalition chair MK Ofer Katz argued that the freeze demonstrates judicial overreach. "The Supreme Court is on a rampage without restraint. It's interesting that when the Bennett government made budget transfers of hundreds of millions in the week before elections, that was the Knesset's authority. But now they're calling it a procedural defect," Katz stated, according to Hebrew media reports.
Election Recess Controversy
The timing of the committee meeting is central to the legal challenge. The Knesset Finance Committee convened and approved the transfers while the legislature was in election recess, a period during which heightened restrictions apply to government spending to prevent coalition parties from advancing their interests during the pre-election period.
Opposition petitioners argued that the committee lacked proper notice, quorum considerations, and authorization to discuss and approve coalition-aligned budget items during the restricted recess period.
Next Steps
Justice Stein ordered the state and committee representatives to report back by Thursday morning, August 5, 2026, at 9 a.m. The court indicated it will hold a fuller hearing "as soon as possible" before a three-judge panel.
