(Updated) When a citizens’ review panel’ gave its formal critique of the city’s proposed budget on Thursday night, a planned freeze of property taxes took center stage.
The critique was made by members of a panel set up by the Board of Aldermen to take an outside look at how better to budget. They put in their two cents at Thursday night’s meeting of the aldermanic Finance Committee.
Calling it “sleight of hand”, blue-ribbon panelist H. Richter Elser (at left in photo) decried a revaluation freeze that is central to the 2009/2010 fiscal year’s budget. The aldermen were unconvinced by his arguments.
The freeze passed the state senate on Wednesday and is now pending before the state house. If permitted, the freeze would allow the city to delay the planned phase-in of new property taxes based on 2006 evaluations. The phase-in would result in higher taxes for homeowners, as the city’s property tax burden would shift from business to residential properties.
A delayed phase-in is key to next year’s proposed budget. But Elser and blue ribbon panel chair Tim Holahan (at right in photo) told the Finance Committee that the plan would amount to passing the buck and hiding the real state of the city from its residents. The two men also voiced dire warnings about the city’s growing debt.
After the meeting Holahan, expressed frustration with the discussion. He said that the phase-in issue is actually a distraction from deeper concerns about the budget and its handling by aldermen. A lack of transparency obscures more significant issues, like the city’s growing debt, Holahan said.
The blue ribbon budget review panel is an 11-member group created last summer through a Board of Aldermen vote. It’s comprised of seven citizens, two aldermen, and the city budget director and controller. The panel is charged with reviewing the city’s budget and providing advice and recommendations to the aldermen.
During and after the meeting, several aldermen voiced their disappointment with the panel, saying that it had not provided “actionable” recommendations in a timely manner. Holahan said that he was happy with what the panel had accomplished, given its “unclear mandate.”
Holahan and Elser’s discussion with the Finance Committee was the first part of a longer meeting, in which the committee approved the budget for next year with two amendments. The recommendations of the panel did not come up again in the Finance Committee’s budget deliberations.
Debt Danger
While the panel does not yet have its final report on the budget, Holahan presented the Finance Committee with the recommendations that the panelists have so far agreed upon.
“The city is in an awful lot of debt and an equal amount of liability,” Holahan said. In terms of liability — money promised for the future — Holahan referred to the millions in pension and health care payments that the city has promised to provide to its union employees. He said later that the city is paying $14 million a year for “sweetheart deals” to unions, and that it should be paying an additional $27 million each year into a fund for future pension and health care payments. The city set aside only $50,000 for such future payments last year, Holahan said.
On top of this, Holahan said, the city has a $700 million debt caused by, among other things, new school construction. He said that the city’s debt and liability added up to between one and two billion dollars.
“That’s a scary number,” he told the finance committee. “In not dealing with these numbers we’re putting future generations … in increasing peril…. I call upon you to weigh that in your deliberations.”
Holahan also asked the board to weigh the ramifications of delaying the phase-in, saying it was “not as forward looking as I would like it to be.”
“If you wanted to freeze homeowner taxes, I would urge you to cut spending,” Holahan said. “We’re tying our hands behind our back.”
A delay “masks the shift” of taxes from business and commercial to residential property owners, said Elser, a blue ribbon panelist and former Republican candidate for mayor. It “works against the goal of transparency” and “helps keep people unaware” of the real state of the city’s tax base, which has shifted from businesses to homeowners.
East Rock Alderman Roland Lemar said that the phase-in delay is necessary given the current state of the housing market, one in which “the value of properties is fluid at best.” The thing to do is freeze taxes and hope that the economy settles down, he argued.
Elser countered that the delay is a matter of political expediency. “We know people don’t like the revaluation… so we’re giving them a false one,” he said. The real issue, he continued, is the city’s inability to attract business, which has increased the residential tax burden. The phase-in delay is bit of “sleight of hand” to conceal this fact, Elser said.
“Spoken like a true Republican,” Beaver Hill Alderman Moti Sandman said after the meeting, referring to Elser’s comments. Sandman said that if the tax phase-in went through, “you would have people lining up at the tax office because they couldn’t pay their bills.”
“To suggest that it’s ‘sleight of hand’ is ignoring reality,” said Lemar. “I think it’s completely disingenuous as to what’s going on.” Lemar said that since the 2006 tax evaluation “bears no relevancy to values in 2009,” the most responsible thing to do is freeze taxes. “It’s the safest thing.”
Performance Metrics
Although the debate over property taxes dominated the finance committee’s conversation with Holahan and Elser on Thursday night, Holahan later said that that topic was just “small potatoes,” compared to larger flaws in the city’s fiscal plans.
“This is a distraction from the real issue,” he said after the meeting. The real problem with the budget, according to Holahan, is the combination of crippling debt it creates and a lack of transparency and performance assessment.
“We’re not getting our money’s worth,” he said.
Holahan said at the meeting that he thinks that there needs to be greater oversight and measurement of effectiveness of city programs, to assess the value of tax dollars. He called for “metrics for performance” for different city departments. “If they don’t have them, they need to define them,” he said.
Clearer expectations and reports about city activities would allow for greater input from residents, Holahan argued. For instance, he said, the average citizen should know that “over 50 percent” of city money goes to education. “That’s what our government does more than anything else, is educate our children,” Holahan said. That fact is more remarkable when it is combined with declining student test scores, Holahan said. “If people saw that, we’d have a lively debate.”
“If all departments had the same performance as our schools, you’d fire all our department heads,” Elser said.
Board of Aldermen President Carl Goldfield (pictured) spoke up to defend New Haven schools. “In fairness to the Board of Education… there’s no simple measuring stick for education,” he said. Parents love their children’s teachers, he said.
“There’s something else going on that just can’t be measured,” he said.
Elser agreed that test scores are not the definitive measure of school success, but in the absence of another measurement, they should be taken into consideration. “We need to be not just taking people off the streets, and actually educating them,” he said.
“I’m not against education spending, but what are we getting for it?” Holahan asked after the meeting.
Blue Ribbon? Honorable Mention?
Thursday night’s meeting included several critiques of the blue ribbon budget review panel.
Finance Committee Chairman Yusuf Shah chided Elser and Holahan for the panel’s slow pace. “I have concerns about timeliness and getting info in to the committee,” Shah said. “In the future you need to get it to us on time or express why we don’t have it.”
“Our charge asked us to make a report on June 30th,” Elser said. He was interrupted by Shah, who spoke to Holahan, “Tim, you know exactly what I’m talking about.”
Later, Westville Alderwoman Ina Silverman said that she was looking for more specifics from the panel after their “crash course” in the city budget.
“What are the priorities? What is it that we can cut?” she said. “That’s the kind of information that would be really useful to me.”
Holahan asked Silverman if she had seen the panel’s summary document. “I identified five core service areas,” he said.
“We can’t do it for you,” he said. He argued that more transparency and better performance evaluation would yield better information from residents about their priorities. In the meantime, given the composition of the panel, Holahan said that it couldn’t speak for the whole city. “We’re almost all homeowners… almost all Caucasian,” Holahan said. Also, most of the panelists are from East Rock and Westville, Holahan said.
After the meeting, the critique of the panel continued.
“I was really disappointed that they didn’t come earlier with more actionable items,” Alderman Sandman said. The panel had nine months and hours of staff support, Sandman said, “and what are we getting for it?”
Sandman said that the panel’s recommendations on union negotiation on pensions duplicated work that he and Lemar had done months ago.
Sandman said that the panel’s final report will not come in time for the board to act on it. He said that he was not in support of continuing the panel for another year.
“I don’t know that what they’ve prepared to date justifies the time and cost in city staff,” Lemar said.
“I think the city resources that went into it were almost nothing,” Holahan said later. He said the panel made a few photocopies; that was it.
“I think it’s fair to say we haven’t had the influence that some might have hoped,” Holahan said. In defense of the panel, he noted, “We had a very unclear mandate.”
Holahan also responded with some criticisms of his own. “They were pretty resistant to any spending recommendations we made,” he said. The aldermanic response to suggested cuts was always, “We can’t do this because X constituency group will be upset,” he said.
Aldermen were unwilling to deal with Yale, Holahan said, calling the university “the big blue elephant in the room.”
“The alders don’t even look at Yale, it’s like they’ve got blinders on,” Holahan said. Many Yale faculty members are engaged in lucrative consulting work using Yale office space and infrastructure, Holahan said, even as Yale continues to have tax-exempt status in the city.
The city should enlist Yale to fund “specific, accountable projects,” Holahan said, like an “early reading success program.”
Holahan wasn’t optimistic that his panel’s final report would be read. “I doubt it,” he said. The blue ribbon panel was the last in a long series of civilian boards whose findings will be filed away on a shelf somewhere, he said.
Nevertheless, Holahan was proud of the panel’s achievements. “We did a lot of independent research, of the kind that never comes from the aldermen.”
“In my mind I have no regrets,” he said. “I think this is part of the process of changing the debate in the city.”
Holahan said that the panel’s final report will be out in the last week of June. The panel will have more recommendations for the board of aldermen before their final vote on the budget on May 26.
freezing the assessment and keeping the mill rate at a higher rate keeps everyone's car tax at a higher rate. yes, it keeps the residential real-estate property owners from seeing more of a shift, but more residents of new haven are renters and more are car owners.
this is a slight of hand to appease our residential home owners happy. and it's also an election year.
the only true answer is cut expenses, that's how you keep your taxes lower. do more with less. using technology is one way to do that.