[Update Tuesday 2:52 p.m.: Democrats and Republicans at the state legislature have reached agreement on a plan to close this fiscal year’s budget gap without cutting any municipal aid, after all, which means New Haven won’t have to scramble to cover $1.7 million in suddenly lost revenue, reports Christine Stuart of CTNewsJunkie. The deal also restores $31.6 million in cut Medicaid reimbursements to hospitals made by Gov. Dannel P. Malloy.]
Mayor Toni Harp began the week with an ominous phone call — informing her that the state squeeze on her city’s budget has started.
She learned that close to $1.7 million promised to New Haven for this fiscal year will never arrive.
And that’s just for starters.
A two-stage budget drama is playing out in Hatford, with severe consequences for mayors like Harp. The first stage is the quest to trim some $200-plus million from the fiscal year budget that ends June 30 to close a budget deficit. Harp said she learned that the state will not come through with the close to $1.7 million in reimbursements to New Haven under the Payments In Lieu of Taxes (PILOT) reimbursing cities for revenues lost due to property tax exemptions.
Harp spoke about the phone call during her latest appearance on the “Mayor Monday” edition of WNHH radio’s “Dateline New Haven” program.
She said New Haven will neither raise taxes nor end the fiscal year in a deficit as a result of this late-in-the-year cut. The current plan is to close the sudden gap by paying less than planned into the city’s self-insurance medical fund.
“We have enough money to pay our medical bills. Don’t worry about that,” Harp said. But the state cut means the city will have less money in its self-insurance fund, which may end up out of balance and require either more investment or a better offsetting performance in future years.
The first stage of the state budget drama is but a prelude to a bigger potential tragedy for cities and towns: Alterations to the state budget for the fiscal year beginning July 1. Lawmakers are struggling to close a $900 million (at last count) deficit that has emerged in that budget. The governor has taken any potential tax increases off the table, which leaves deep cuts as the only option.
Which “scares” Mayor Harp. Because the budget she presented for New Haven’s next fiscal year counted on a $15 million PILOT increase approved in the coming year’s state budget. That money is now imperiled.
How much it’s imperiled is a crucial question, one that will determine whether New Haven ends up making extra cuts of its own or raises taxes. Harp said she is anticipating that the state will repeat the $1.7 million PILOT cut in the next fiscal year budget. She’s hoping that Democratic legislative leaders succeed in protecting the rest.
“I’m really a little frightened that they might want to take a little more, since it’s at the beginning of the year. They’re not going to raise taxes at the state level,” Harp said. “I hope they don’t force us to raise taxes at the local level.”
Magnet Tuition
Another looming state cut has potentially pitted New Haven against the suburbs.
That cut: some $1.5 million in promised magnet-school funding.
Harp said on “Mayor Monday” that that cut is what prompted the city to consider beginning to charge suburban school districts tuition for the students they send to New Haven magnet schools, a proposal that sparked much debate after the Independent first reported about it last week. Harp said the schools need to make up that money somehow, and tuition charges — which other districts already levy for out-of-town magnet school students — seemed a fair way. The per-student annual tuition (charged to the district, not the family) would rise from $750 to $2,250 over three years.
Officials in West Haven and Hamden have bristled at the proposal. As reported in this New Haven Register article by Mark Zaretsky, West Haven’s mayor threatening to retaliate by reconsidering a building-permit-fee ceiling his city had agreed to set on a regional high school New Haven is building there.
Harp said she can understand the suburbs’ disappointment at suddenly facing the tuition bills, given that they face budget challenges as well. He said she hopes they “step back” and “understand” that the city needs to pay its bill and is losing money that covered some of the magnet costs. She noted that the state still reimburses suburbs for students they send to urban magnet schools, and that New Haven pays for the students’ transportation.
“What I’m hoping is that West Haven, Hamden all the other cities that have children in New Haven public schools will work with us to try to get the magnet school dollars bolstered in the budget,” Harp said.
Click on or download the above audio file to listen to the full “Mayor Monday” episode on WNHH radio, which also touched on Elsie Cofield, heroic first responders, the Festival of Arts & Ideas, and “equity” funding of schools.
Monday’s episode of “Dateline New Haven” was made possible in partnership with Gateway Community College.
Thank the former mayor. New Haven had a few magnet schools. The state gave money for these schools. Mayor sees this and says, let's turn as many schools as possible into magnet schools (to save city money?? To force the destruction of neighborhood schools?).
The state says, whoah, hold on there pardner.
Mayor says, too late.
State says, too much.
Don't believe me? Hillhouse is a magnet school.
Here's a list of magnet schools in NH: http://www.nhps.net/magnets