New Haven Register (New Haven, CT)
‘Extra revenue’ line in city budget takes a big hit
Decline fuels New Haven deficit
NEW HAVEN — Every year the city puts a line in the budget for something called “revenue initiative,” which represents efforts to get outside contributions beyond state and federal grants or from such things as property sales.
It was $18.6 million in fiscal 2018, $6.1 million in fiscal 2019 and, this year, it was put in the budget by the outgoing administration at $4.9 million.
In the November monthly budget report, that projected revenue is down to $400,000 and Budget Director Michael Gormany said recently it is between zero and $500,000.
“We might as well project based on what we know, based on how things are going. If we get it, it just helps the deficit that we have currently,” Gormany told the Board of Alders’ Finance Committee recently.
“I would rather project what I realistically think is going to come in, than to have an expectation at a higher number and then at the end of the year not actually realize that,” Gormany said.
The December report projects a $6.3 million deficit for this fiscal year mainly because of the $5.9 million school board deficit. That projected school board deficit, however, was as high as $8.4 million just a month before, and Gormany told the committee they are working with the board to get it down further.
The revenue initiative can represent talks with the city’s large institutions, such as Yale University and
Yale New Haven Hospital, and others. Both the hospital and the university have made contributions to the city in the past. Yale University’s contribution last year was $12 million.
Elicker said his understanding of the revenue initiative is that it encompasses all revenue items that officials are not certain will come through and are not tied to a particular line item, a process that can include talks with partners for payments in lieu of taxes.
The new mayor does not appear to be as worried about this year and the possibility of less money from the revenue initiative, as he is is concerned about the next fiscal year.
He has not been reticent to talk about the budget difficulties that New Haven will face for fiscal 2020-21, a document due to the Board of Alders March 1.
“I can say that next year is going to be a really, really difficult challenge. It is a bad situation,” Elicker said.
The mayor, in his recent state of the city remarks, said New Haven is in a “precarious” position because of underfunding and income inequality.
His transition team projected a budget deficit in fiscal year 2020-21 as high as $50 million, given the $35 million increase in debtservice costs between the current fiscal year and the next, along with $15 million in inflationary costs and projected school board deficits.
As for the loss of revenue this year, Elicker said: “I can say we are looking at a lot of options.”
Gormany said they will continue to work on boosting the revenue initiative throughout this fiscal year. He did not say what had happened to cut the projected revenue initiative in November, which was at the time of the changeover between the two administrations.
“The new mayor is going to have, I guess, conversations with Yale and other folks and continue those talks and implement his strategy in doing so,” Gormany told the Finance Committee.
“There are a lot of factors that go into that revenue initiative number and we will see what will happen.” Gormany told the committee. “I am not going into the details because some of it is with other city partners. I am not going to get into the details because they are not official talks,” the budget director said.