New Haven Mayor Toni Harp called on the state not to renege on its $15 million promise to New Haven this year in order to help solve a budget crisis. But if it does renege, she called on the state to give tools to fix the city’s own budget woes.
The tools Harp requested: the power to raise revenues other than by jacking up people’s property taxes.
Harp made that request in her weekly “Mayor Monday” appearance on WNHH radio’s “Dateline New Haven.”
“We’re between a rock and a hard place,” Harp said. “We cannot go back on our promise to provide resources for our city.”
She spoke at a critical time for state budget-makers — and on the brink of what could become a critical time for New Haven budget-makers as well.
State budget-makers are wrestling with a $900 million projected deficit for the fiscal year that starts July 1. Democratic Governor Malloy and the legislature’s Republicans have put tax increases off the table. So huge cuts are in the offing.
One area targeted for cuts: the hard-won increases the state has promised cities through the Payments in Lieu of Taxes (PILOT) program. For decades New Haven and other cities have complained that the state has underfunded that program, which reimburses cities for tax revenue lost on state-owned property and hospitals and colleges and universities. New Haven has been counting on a $15 million increase approved for the upcoming fiscal year.
That’s a big deal, because of Connecticut’s heavy reliance on property taxes. As much as half the property in New Haven is tax-exempt, meaning city taxpayers end up paying twice as much as citizens of wealthy suburbs for comparable property.
Based on that promise, the Harp administration has submitted a proposed budget for the fiscal year beginning July 1 that contains no tax increase.
Last Friday Harp joined other big-city mayors at a Capitol press conference urging the governor and the legislature to keep their PILOT promise. Urban legislators promised to fight to do that. But with so much red ink to erase, and apparently little will to raise taxes, it’s hard for observers to imagine that PILOT money remaining off-limits to budget-cutters.
In which case Harp has a Plan B, which she unveiled in the WNHH interview: Pass enabling legislation permitting New Haven to raise revenues other than property taxes so it can avoid saddling property owners with higher tax bills.
She offered a menu of choices, from local sales taxes to higher permit fees to a greater local share of the conveyance tax paid on real estate transactions.
“If they decide to reduce the PILOT by a certain percent, then give us a resource to make a decision, it would be a local decision, about whether or not we could use an enhanced sales tax” or other measures to make up that money, Harp said. “Don’t leave us out there with nothing.”
Harp said her predecessor, Mayor John DeStefano, did a “great” job trimming the size of government. “Almost every department is reduced by 40 to 50 percent in terms of personnel” from 15 years ago, she said. “We really have nowhere to go in terms of cutting personnel.” Cutting police positions, for instance, would jeopardize public safety, she argued.
The Yale “Clarification” Bill
Markeshia Ricks Photo
Harp supporting the Yale tax-exemption bill, at a press conference last week.
Meanwhile, on Tuesday Harp renewed her support for a state bill to reexamine and “clarify” a 182-year-old exemption the state gave to Yale and five other colleges in their infancies. Harp first publicly endorsed the bill last week at a press conference in New Haven. She renewed the call Tuesday in testimony before the state legislature’s Finance, Revenue and Bonding Committee.
Opponents and proponents of the bill, including city alders, traveled to Hartford as well Tuesday to testify before the committee. “Oftentimes activities [that] generate income for Yale University … exist inside nontaxable buildings. Why would Yale’s use of those services be treated than a private market competitor?” New Haven State Rep. Roland Lemar asked in testimony before the committee. “That’s the clarification the city is trying to get to.” He specifically cited a travel office Yale maintains in a not-taxed building.
Yale Associate Vice-President Richard Jacob responded that that the travel service is “largely for alumni,” with an “educational component.” It therefore falls under federal tax-exempt guidelines, he argued. Jacob argued that court interpretations “have been absolute” that “even activities that occur within academic buildings on the university [campus] do not affect property-tax status.”
Harp emphasized in the WNHH interview that she doesn’t see that bill as a potential windfall for New Haven. She really does seek clarification of an out-of-date exemption; the assessor has told her that New Haven probably wouldn’t reap appreciable new revenue if the exemption disappeared or changed significantly. Yale pays $4.5 million a year on its taxable property, and gives the city $8.3 million a year in voluntary payments.
The legislature is also considering a bill to require Yale to invest more of its endowment in the local economy or else pay the state $78 million a year. (The CT Mirror’s Jacqueline Rabe Thomas wrote this account on a hearing Tuesday about the bill.)
Later School Times
Also in the WNHH interview, Harp endorsed an idea that has been gradually gaining steam in Connecticut and across the country: rethinking school start times so that grade schoolers start the day earlier and high-schoolers later.
New Haven currently does the opposite. As a result working parents who don’t want to leave their kids alone at bus stops often have trouble making it to work on time because school starts as late as 9 a.m., or even after. Meanwhile, high schools start an hour or more earlier — for kids who can get themselves to school on their own, and whose natural body rhythms keep them up later at night and asleep later in the morning.
The issue reemerged last week when the school board considered a plan to start school even later for grade schoolers — 9:35 a.m. in some cases — in order to save $1.5 million a year by staggering bus schedules. That plan met an outpouring of opposition, leading officials to seek alternative cost-saving ideas.
Harp noted that the state has been considering legislation for years to move high-school start times later and grade-school start times earlier. She said she supports the move and would like to see New Haven begin to plan it.
“It would require some planning. Maybe they couldn’t do it in September,” Harp said. “But I believe it could be done. Especially if it were required statewide.”
“I think back to when I was a mother” raising young children, she said. “It has got to be rethought. … I absolutely believe these young kids need to get [to school] earlier” than high schoolers.
Opponents of the idea argue that high schools need the longer day to fit in sports and other after-school activities. Harp responded that she believes that scheduling can be worked out, and that state legislation would help move the needle.
Some opponents argue that later school starting times would reinforce coddling of teenagers who need to know what it’s like to get up early in the real world and go to work.
Click on or download the above audio file to hear the full episode of “Mayor Monday” on WNHH radio’s “Dateline New Haven.” Besides city and state revenues and schools tarting times, the episodes included reflections on the life of Elsie Cofield, among other topics.
Monday’s episode of “Dateline New Haven” was made possible in partnership with Gateway Community College.
Connecticut is a highly segregated state, by race and by income. As is it is, the unacceptably high property tax rates in our cities lower urban property values, thus making it harder for low and moderate homeowners, many of them people of color, to build equity in their homes. Similarly, the higher conveyance tax rates that already exist in the cities impose costs on the people who live here, people who are disproportionately brown, black and poor.
Let me say that again: high taxes in the cities are bad for poor people of color.
We cannot make the problem even worse by increasing the tax incidence on urban dwellers. In a state as segregated as ours, local option taxes are inherently regressive. It's an embarrassment that the Harp administration couldn't figure out how to decrease property taxes with the increased state aid that we were promised this year. Now that that aid may not come through, they have no cushion and are looking to raise taxes, taxes that disproportionately hit the people they purport to present. Some of us will drive to North Haven to avoid the additional sales tax increment. Guess who won't have that choice?
You can't go back on your promise to "provide resources for our city"? What about promises to low-income and middle-class homeowners whose property values will go down if you raise their property taxes, who will lose equity in their homes to additional conveyance taxes? And people who can't afford or choose not to own cars and therefore can't escape an additional sales tax by shopping in the 'burbs?