The Middletown Press (Middletown, CT)
City sees need for relief funds
New Haven faces possibility of laying off employees
NEW HAVEN — New Haven needs a hero.
A hero, as in the Heroes Act, that promises millions for cities and states across the country hard hit by dropping revenues, jobless residents, closed businesses and unplanned expenses for the unscheduled COVID-19 pandemic.
The Finance Committee of the Board of Alders has approved a budget for fiscal 2021 that orders unspecified cuts of $2.5 million in the education budget, $3.854 million across all city departments and assumes it will get $2.5 million in additional money from its largest employer — Yale University — an $8.8 million hole in the proposal submitted by Mayor Justin Elicker.
It cuts the proposed tax increase of 3.56 percent to 1.18 percent, but doesn’t say where the cuts in city departments should be made.
The Board of Education was hit hardest as its budget request for a $10.8 million was cut by Elicker to $3.5 million and then to $1 million by the Finance Committee.
Preparing a local balanced budget goes on, even as major solutions to painful cuts in services loam, but Congress remains divided, at this point, on what will survive in the $3 trillion Heroes Act, of which state and local government assistance makes up one-third.
The Finance Committee also puts aside $4.8 million in a reserve fund for next year to counter unanticipated expenses. The projected $15.3 million gap in the budget this year, maninly due to declining revenues, will be covered by the city’s current fund balance, according to officials.
Its budget will increase the mill rate to 43.73 from 42.98. Elicker’a proposal increases the mill rate to 44.51.
The $569.1 million budget submitted by Elicker cuts 80 vacant or defunded positions, maninly in the police department, with 12 in the Fire Department, while the Education Department plans to cut 30 positions through attrition, among other things. It does not contain any layoffs.
The mayor and the alders are in conversation about the committee’s amendments to his budget with a decision on a final document to him by May 26. Like the alders, he hopes the federal funding for cities materializes.
One plus so far is the $8.5 million share New Haven will receive from the federal CARES Act’s Elementary and Secondary Schools Emergency Relief Fund which is supposed to cover COVID-19 related expenditures for the schools.
Elicker has said for awhile now that it is premature to include funds in the fiscal document that may not materialize from the federal government and Yale University. He said the budget can be amended at a later time to reflect the hoped for largese from the federal government, when and if, it makes its way down to the local level.
“The Board of Alders
and I are very much on the same page about needing to address the financial challenges that the city is facing without putting an undue burden on the taxpayers, while providing adequate services to residents. Our team in City Hall in preparing for the budget worked very hard to strike the right balance under challenging financial circumstances,” the mayor said.
“The proposed cuts that have been made (by the Finance Committee) create a very challeging situation and we are discussing how to make sure that we provide services and keep taxes as reasonable as possible,” Elicker said.
Alder Adam Marchand,
D-25, the vice chair of the Finance Committee and Majority Leader Richard Furlow, D-27, did not return calls seeking comment.
There were two well attended virtual public hearings on the proposed budget that mainly centered on Yale University adding to the $13 million it is scheduled to voluntarily give to the city, which includes the $3.3 million it pays for fire service. New Haven is a city where just under 60 per cent of its grand list is tax exempt with Yale property responsible for 42 percent of that, a situation that handicaps its ability to raise revenue.
Yale New Haven Hospital reported recently that a $300 million fiscal balance last year, has now swung to a $350 million deficit due to expenses tied to COVID-19. Its payment in lieu of taxes to the city remains flat at $2.8 million.
The main line items mentioned at the public hearings covered funding for the library and education which was described as inadequate at both the local and state level with teachers buying needed supplies and large elementary school classes lacking aides.
Sarah Miller, a vocal education advocate, said laying off teachers would will mean larger classess. She said there should be nurses in all the schools and trauma services added in light of the coronavirus, but she doesn’t see that materializing without Yale making a larger contribution.
Yale President Peter Salovey has responded to these criticisms in the past.
Cutting a budget through layoffs or furloughs is not straight forward. Under layoffs, the city would still be responsible for some 60 percent of the cost of unemployment, as it is selfinsured, with savings less than expected, at least in the first year.
Layoffs also occur by seniority, where the individual laid off may not have been the one chosen by a department head. Furloughs have to be negotiated with the unions and show lesser savings.
The required payments to debt service, pensions and healthcare should not be cut, the mayor has said.
In explaining his budget in March, he said the major cost driver is debt service which went from some $30 million in 2018 to $44 million this year with a payment of $57 million budgeted for next year.
Elicker and FRAC, the Financial Review and Auditing Committee, blames the increasing debt service on the last administration which refinanced $160 million in debt that then increased debt payments further out.
A review of general fund budgeted positions shows a high of 1,602 personnel in fiscal 2009 that is now at 1,404 in Elicker’s proposed budget for fiscal 2021.
The biggest departments, with the most employees, are in public service with $442.8 million budgeted for police and $33.6 million for fire service. They both are cut in Elicker’s proposed budget and he has said more cuts would increase the overtime accounts, a perennial problem. Adding sworn personnel to the police department is already off schedule as new recruit classes have not started.
Now that the Finance Committee has made its recommendation, other members of the full Board of Alders will be weighing on what the budget should contain.
One suggestion was a continuing freeze on hiring, as well as a freeze on raises, which would have to be negotiated with the unions. There also were concerns on the investment return for the city’s pension funds and how that will impact future budgets.