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March 2, 2021

New Haven mayor plots two budget paths - crisis vs. forward together

PHOTO | CONTRIBUTED New Haven Mayor Justin Elicker
By Michelle Tuccitto Sullo

New Haven Mayor Justin Elicker presented two fiscal year 2021-22 budget proposals Monday, one he has labelled a “Crisis Budget,” which he said will mean painful cuts, and the other, “Forward Together,” which would maintain current services.

The crisis plan doesn’t include additional funds from the state or tax-exempt institutions like Yale University, while the latter plan does, according to Elicker.

This “crisis” general budget submitted to the Board of Alders for review is for $589 million, while the “Forward Together” proposal is for $606 million.

“This has been one of the most challenging budgets our city has ever had to work through,” Elicker said. “Our city is facing a deep financial crisis, unlike any we have seen in decades.”

According to Elicker, the city faces a potential deficit of $66 million. The coronavirus pandemic has played a role in declining revenues. Revenue from building permits, for example, was down roughly $7 million, and funds from parking meters, with fewer people coming to the city because of the pandemic, declined about $2.2 million.

However, Elicker said the main contributors to the shortfall are salary increases, pensions and other fixed costs.

According to Elicker, approximately 60 percent of the city’s real estate is non-taxable. 

“That means 40 percent of the city pays 100 percent of real estate taxes,” Elicker said. “Yale University accounts for the vast majority of non-taxable property.” 

Elicker said Monday his administration is in “active and positive conversations” with both the state and Yale University about the potential for increased contributions to the city.

“We are hopeful that both entities will realize that we all need to be a part of a solution that sets us on the right course,” he said. “Our conversations with Yale University are progressing in a productive manner. I am cautiously optimistic that Yale University understands it needs to play a much more active role.” 

Meanwhile, the state legislature has passed a bill, proposed by Senate President Pro Tempore  Martin Looney (D-New Haven), which would increase funding for the city and other municipalities through the Payment in Lieu of Taxes (PILOT) program. Through PILOT, the city gets reimbursed for lost revenue from non-taxable properties. As of Tuesday morning, it awaited  Gov. Ned Lamont’s final approval. 

“The state capitol has taken a historic and courageous step in ensuring the formula (for PILOT funding) is based on need,” Elicker said Tuesday. “With about 60 percent of New Haven’s real estate being non-taxable, PILOT funding is very important to us.”

Under the “Crisis Budget,” with no increases in funding from the state or Yale, the city would close Mitchell Library, East Shore Senior Center and one fire station. It would also mean eliminating vacant positions and employee layoffs, according to Elicker. This budget, if adopted, would mean a 7.75% tax increase. 

Under the “Forward Together” budget, which includes a hoped-for increase in funding from the state and Yale University, the city would be able to maintain its current level of services, Elicker said. 

Karen Peart, a spokesperson for Yale University, when asked about Elicker’s budget proposals, said via 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.”

The city’s current mill rate is at 42.98. Under the “Crisis” plan it would rise to 47.28, while the “Forward Together” plan would bring it to 43.88, the budget proposal shows.

City officials will host public hearings on the budget throughout the spring before it is finalized.

To view Elicker’s full budget proposal, click HERE.

Contact Michelle Tuccitto Sullo at msullo@newhavenbiz.com.

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