The Knesset plenum voted late on Monday evening to spilt up the Arrangements Bill, which is attached to the 2026 state budget.
The decision passed by a margin of 60-56. The two haredi parties – Shas and United Torah Judaism – had threatened to vote against the coalition amid disagreements over the controversial haredi draft bill being advanced in the Knesset. This would have created significant delays to an already tight deadline to pass the budget in the annual high-stakes process that could trigger early elections.
The Arrangements Bill is presented to the Knesset each year alongside the state budget. It incorporates numerous legislative amendments that the government wishes to pass, making it a critical part of the state budget process.
Coalition whip Ofir Katz announced that despite the disagreements, Shas and the Degel HaTorah faction within United Torah Judaism would vote in favor of splitting the Arrangements Bill.
“The talks will continue until a solution is reached,” Katz said on Monday evening.
The haredi parties have reportedly given up on a clause in the draft bill that would allow for the reduction of draft targets in the coming years, according to a Monday KAN News report.
The plenum vote on the Arrangements Bill was initially scheduled to take place last week but was pushed off amid disagreements with the haredi parties.
Throughout Monday, deliberations continued, causing the vote to be delayed into the evening, and questioned if it would be postponed to Wednesday.
In general, attaching the Arrangements Bill to the State Budget Bill has drawn criticism in the Knesset and among the public.
Its critics claim that extensive reforms are placed within the bill that may not be essential for passing in the state budget, which is already lengthy and has a narrow time limit.
The Arrangements Bill this year includes a controversial structural reform to Israel’s dairy sector, being led by Finance Minister Bezalel Smotrich.
By law, the state budget must be passed by the end of March in all three readings, or else the Knesset will automatically dissolve, and early elections will be called.
The Knesset’s legal adviser, Attorney Sagit Afik, issued a letter last week recommending that the dairy reform be separated from the state budget and advanced independently.
Afik had noted that this year the Arrangements Bill comprises approximately 420 pages and that there has already been a significant delay in its submission.
The Knesset’s House Committee then debated into the night whether to keep the dairy reform as part of the 2026 State Budget Bill. It ultimately voted against separating it from the Arrangements Bill. The vote passed by a narrow margin, with eight MKs voting in favor and seven against, following a heated debate.
The Knesset advanced the 2026 state budget in its first reading in January by a 62-55 vote. It followed weeks of tense coalition negotiations with the haredi parties. The budget will still need to pass two more readings.