New Haven Register (New Haven, CT)
State, Yale aid needed to avert ‘Crisis Budget,’ Elicker warns
Without ‘significant’ funding, residents could see tax hike, cuts to services
NEW HAVEN — City taxpayers could face a 7.75 percent tax increase — with cut services — if the city doesn’t receive commitments for “significant increases in funding” from the state and Yale University, Mayor Justin Elicker said Monday as he submitted his $695.53 million fiscal 2021-22 budget to the Board of Alders.
If the city has to pass some version of the “Crisis Budget,” officials would look to close the East Shore Senior Center, the Mitchell Library branch of the New Haven Free Public Library in Westville and the Whitney Avenue Fire Station, Elicker said in an afternoon virtual press conference.
Elicker, faced with a potential $66 million budget shortfall for the coming fiscal year, actually submitted two budgets:
▶ A “Crisis Budget” that lays out a scenario that includes “dramatic cuts,” including employee layoffs; closing a library, a firehouse and a senior center; and eliminating a host of vacant positions.
A “Forward Together Budget,” ▶ which would keep city services more or less at the current level “and work to right our financial ship,” including shoring up the city’s pension funds and reducing future debt service payments.
“Let’s be clear,” Elicker said in a budget message. “The Crisis Budget would have a disastrous impact on the city. Our team will work tirelessly over the next several months to avoid this potential by pushing the state and Yale University to do their part.
“We do not want to pass this budget,” he said at the press conference.
By “significant increases” from the state and Yale, Elicker means he’s looking for a combined increase of $53 million — or more, he said.
He estimated that if the changes to the state’s Payment in Lieu of Taxes program that passed the state House last week and passed the Senate Monday, the amount of PILOT funds New Haven receives from the state could rise from $41 million to $90 million — an increase of $49 million. The money has not been allocated.
The proposal was put forth by state Senate President Pro Tempore Martin M. Looney, D-New Haven. “There is bipartisan support to this,” Elicker said.
“I am cautiously optimistic about the conversations we are having,” Elicker said. He declined to say what he’s seeking from Yale as a specific dollar figure.
Yale spokeswoman Karen Peart, asked what
Yale’s response might be to being asked to pay more, said in an email, “The University maintains an open dialogue with the City of New Haven to work together on a wide variety of opportunities for economic development, educational programs like New Haven Promise, and Yale’s community investment program.”
Were the city to get the $53 million it’s seeking, the city has a plan that would “keep the status quo for city services” while not raising taxes, Elicker said.
But if more state and
Yale money don’t come in?
Under the “Crisis Budget,” a taxpayer who owns a $200,000 house assessed at $140,000 would pay an additional $477 a year in tax, seeing their annual tax bill rise from $6,143 to
$6,620. Someone who owns a $350,000 house assessed at $245,000 would see their tax bill rise from $10,750 to $11,584 — a total of $834.
Someone with a
$500,000 house assessed at $350,000 would see their annual taxes rise from $15,358 to $16,548, an increase of $1,190.
In New Haven, “Our city is facing a deep financial crisis unlike any we have seen in decades,” Elicker said in his budget presentation. “As we worked to prepare this year’s budget, we faced a $66 million deficit.
“The main driver of this deficit are structural financial issues that continue to worsen each year — increased pension and debt costs, employee salary increases and other fixed costs,” Elicker wrote. “The COVID-19 pandemic also contributed to the deficit primarily through falling revenues.
“Each year, our financial situation becomes more challenging,” he wrote. “Last year, our city’s budget included the elimination of over 100 positions, the cutting of numerous programs and a small tax increase. Our options for cutting more of the city’s
budget are becoming more and more limited and New Haven’s property taxes are already high.”
The 2021-22 budget cycle “presented tougher challenges than in normal years,” Elicker wrote. “To close the projected $66 million dollar gap, the city had to make difficult decisions about what is essential versus what is desirable for our city.”
Both city pension boards voted last week to reduce their budgeted investment rates of return from 7.75 percent to 7.25 percent, he said.
In addition to the facility closures, the “Crisis Budget” would including a number of layoffs, including a net loss of seven police positions, said city Acting Budget Director Michael Gormany. The budget actually eliminates nine police positions but adds two new sergeants, he said.
The “Crisis Budget” contains a total of $2.65 million in elimination of a total of 16 vacant positions, said Elicker.
While the Elicker administration is seeking a greater contribution from Yale University, it is not seeking more from Yale New Haven Hospital, he said.