Melissa Bailey Photo
When he picked up the mayor’s new proposed budget Monday, one alderman prepared to bring a tough choice back to his neighborhood: Should we raise taxes? Or cut city services?
Fair Haven Heights Alderman Alex Rhodeen put it that way Monday evening in City Hall, where he received Mayor John DeStefano’s proposed budget for FY 2010-11.
DeStefano presented a $476 million spending plan Monday afternoon that raises city revenues by 6.1 percent and relies on a $50 million plan to “monetize” parking meter revenue, a controversial process that has raised questions in other cities about sacrificing long-term government revenues for short-term cash.
Now that they have the proposal, aldermen take the helm of the budgeting process. They’ll hold public hearings, deliberations, and vote on the budget before the clock strikes midnight on Tuesday, May 25. They have two days before the first budget workshop Wednesday, and one week until the first public hearing on the budget.
The mayor proposes spending $12.5 million more than last year, largely due to an increase in health care, pension and workmen’s compensation costs, he said. The plan represents a 2.6 percent increase over last year’s spending.
Click here to read his 500-page budget document, which was submitted to the Board of Aldermen Monday as required by city charter.
To support his spending plan, DeStefano doesn’t have to raise the tax rate. He proposed dropping it by one mill, to 41.21 mills. (That’s $41.21 per $1,000 of assessed value of taxable property.) Because the city is entering the third year of a property revaluation phase-in, the grand list is growing, and a 41.21 mill rate translates to a 6.1 increase in tax bills.
“All homeowners will see increases in taxes this year,” the mayor said.
That proposal earned a strong reaction from West Rock Alderman Darnell Goldson (at left in photo above).
“I cannot in any way, shape or form [support] a 6 percent increase,” he said.
“I’m certainly not going to support a raise in spending,” Goldson added. He declined to identify any specific service he would cut.
West River Alderman Yusuf Shah (at right in photo), chair of the aldermanic Finance Committee, will govern the budget hearings for the third year in a row. He said he’d look at the mayor’s budget and decide if it’s “reasonable and justified.”
“I will support a 6 percent hike [in taxes] if it’s reasonable,” Shah said, “because at the end of the day, people want services, and services have to be paid for.”
Shah said he is glad the mayor’s proposal includes no layoffs. Laying people off at this point in time would be “devastating,” he said. “We’re not in the business of creating hardships.”
He was asked if some taxpayers may consider their rising tax bills — some will be far higher than 6 percent — a hardship. Shah noted that the mayor aims to offer the senior tax freeze for a fourth year in a row. Others who are facing hard times can apply for tax abatement, he noted.
“If you really have a hardship, the city is always open to helping,” Shah said.
How much more would homeowners have to pay? That depends on how much their property value rose in revaluations, which shifted the tax burden from commercial to residential property owners. The average residential tax increase was not available Monday. Due to depreciation, tax payments on cars and personal property would go down.
Part of the reason the proposed tax levy would rise is a projected $5.5 million drop in state aid, the mayor said.
DeStefano was asked about how to sell a tax increase in tough economic times.
He said the city can’t wait to embark on its school change initiative, and the city is getting good results and services now. The last time he cut city services, including closing three senior centers and cutting back library hours, he saw “pushback” from the community, he said. A decline in state aid makes things harder, he added. He said he plans to have an honest conversation about the choices the city has to make.
The budget would avoid layoffs, keep city services at current levels, and raise some fees, the mayor said. Unlike last year, he agreed to give more money to the school system. He awarded the schools a $3 million increase in spending from the general fund, which is raised mostly by local property taxes, state aid and local permits and fees. Under his budget, the schools would get $176 million from the general fund, as the school board requested.
The $476,262,235 general fund is just part of the city budget. DeStefano’s plan also calls for spending $46.0 million in city bonds for capital projects and $148.2 million in special funds.
DeStefano focused his comments on the general fund. He said he started the budgeting process with a $46 million gap, which he whittled down to $12.5 million through a variety of cost-control and revenue initiatives.
Parking Plan
The biggest new proposal is a $50 million parking meter monetization plan. Under the proposal, the city would get $50 million up front in exchange for pledging to give its parking meter revenue to an Ohio company for the next 25 years. The mayor proposes putting that $50 million in a so-called Property Tax Stabilization Trust Fund. He proposed using $10 million each year, for the first five years, starting in FY2010-11.
The plan would essentially borrow from the future in order to bail out the city out during the next few years, when state aid is expected to drop off during a statewide fiscal crisis. The plan would “stabilize taxes until the economy improves,” according to the mayor’s budget.
The city is in negotiations with Gates Capital Partners of Mayfield Heights, Ohio, over the terms of the agreement. The deal would need aldermanic approval. DeStefano submitted the plan to the Board of Aldermen Monday.
Meanwhile, the city plans to borrow $50,000 in government bonds to replace city parking meters with new “pay stations.”
DeStefano said one major difference in his budget this year is that he’s not assuming an increase in state aid, and isn’t resting on one-time revenues from selling off assets.
The mayor assumed $201.8 million in state aid, which is based on the governor’s proposed budget. State aid would now comprise 46 percent of the city budget, down from 55 percent.
Unlike in past years, the mayor decided not to assume legislators would bring in any more state aid than the governor apportioned.
“They haven’t proved to be good assumptions,” DeStefano noted. He said the city just hasn’t been able to get state legislators to agree with him on his yearly crusades at the Capitol for new types of revenue or increases in state aid.
why doesn't he charge commercial properties what they actually owe in taxes? OH, that's right, the assessor we hired (on a contract) who did the assessments was later claimed to have "not been hired" ... allowing us to conveniently ignore the actual amount that Gateway Terminal should be paying.
http://www.newhavenadvocate.com/article.cfm?aid=11109
People want to get up in arms about screw-ups by City hall, I don't see anyone looking at this one.
We hired an audit company in 2005 (which has certified letters proving we hired them) and they revealed that Gateway Terminal should have been paying at least 235,000 dollars a year dating back to at least 2006.
That's 1 million dollars to date. Instead, Gateway pays 415$ per year.
While I applaud tax raises at a time when we do need more money, I don't understand why businesses like Gateway Terminal are allowed to pay a fraction of what they owe.
Who knows how many other companies are in a similar position? I'm counting 1 million dollars on this one alone.