'Tax dollars for need, not genocide': Israeli bond buying sparks backlash

State and local governments across the US are scooping up Israeli bonds at record levels, lured by a mix of hefty returns and government incentives for Israeli debt, but the move is sparking backlash among some locals.

States across the US have accelerated their purchase of Israeli bonds since the Hamas-led 7 October attacks on southern Israel. Last year, Israel sold a record $3bn in bonds.

Israel’s need to fund its war on Gaza and the eagerness of many US state governments to buy Israeli debt has led to states becoming massive investors in the country.

Palm Beach County in Florida has now become the world's largest investor in Israeli bonds, with about $700m of its $4.67bn portfolio invested in the foreign country’s market, Joseph Abruzzo, clerk of the circuit court and comptroller, announced in March.

“I am proud to stand with what I consider our greatest ally in the entire world – Israel,” Abruzzo said in an interview with the Jewish Press Agency.

“With that said, these are incredibly safe investments. They’re making an incredible return for county taxpayers and it made perfect sense for us from a fiduciary standpoint.”

But the move has sparked local backlash. Some residents of Palm Beach County filed a lawsuit this month against the county. Protestors have also expressed their anger at the local courthouse.

"Our tax dollars should go to our needs and not fund the genocide,” a Palm Beach County resident who called herself Lydia S told the local Wptv news.

Abruzzo said he expected the "frivolous" lawsuit to be dismissed.

Palm Beach County isn't alone.

In May, Ohio treasurer Robert Sprague said the Rust Belt state had purchased $30m in two-year fixed-rate Israeli bonds.

“With its long track record of providing competitive rates and timely and reliable repayments, Israel Bonds continues to be a sound investment for Ohio,” Sprague said in a statement. 

“We’re proud to continue the state’s long-standing history of purchasing these bonds.”

Israel is growing more isolated on the world stage as a result of its offensive on Gaza, which has killed at least 36,050 Palestinians and wounded an additional 81,026. It is also the subject of a case at the International Court of Justice, while the chief prosecutor of the International Criminal Court has called for arrest warrants for Israeli leaders.

But investors have shrugged off the international censure. During its first international bond sale since 7 October, Israel raised a record $8bn despite Moody's downgrading Israel’s credit.