THomas MacMIllan Photo
As the city’s bond ratings continue to drop, mayoral candidates Henry Fernandez, Toni Harp and Justin Elicker Wednesday said the city needs to change its financial course to avoid following Detroit off a cliff and into bankruptcy.
Andy Ross, a Republican aldermanic candidate, weighed in, too.
At a Wednesday morning press conference in Morris Cove, Fernandez (pictured) said the city needs long-term economic growth based around the city’s growing medical sector. In the near term, Fernandez said, the city needs to “hold the line on spending” and “build a coalition” to recover more money from the state.
Fernandez didn’t offer specifics on how he specifically he would increase the city’s cash reserves, cut spending, and avoid raising taxes. He said only that he would go through the budget in detail to find cuts, looking specifically at the possibility of reducing the number of administrators in the public school system.
Fernandez is one of four Democrats looking to win a Democratic mayoral primary election on Sept. 10.
Fellow mayoral candidate Toni Harp said she would look at saving money by consolidating the maintenance efforts of several city departments and looking at the number of certified employees the Board of Education employs. She said New Haven public schools have a higher percentage of certified and licensed employees than other towns, which increases salary costs.
Mayoral candidate Justin Elicker said the city budget needs cuts “across the board.” He called for capping new borrowing before making the city budget and renegotiating pension deals with city employees, a process in which the DeStefano administration has been engaged with municipal unions.
Mayoral candidate Kermit Carolina couldn’t be reached for comment by press time.
Fernandez held his Wednesday press conference in front of campaign supporter Sandra Travino’s house on Concord Street in Morris Cove. He stood in front of a chart showing changes in Standard & Poor’s ratings of New Haven’s bonds over the last 13 years, starting when Fernandez joined city government as development chief.
At that point, S&P’s rating was BBB+. It climbed to A+ while Fernandez was in City Hall. After his departure, it began to fall, returning to BBB+ this month.
“We are here at a home in the East Shore because it’s homeowners and taxpayers who ultimately bear the brunt of higher taxes and economic problems,” he said.
Lowered bond ratings will make it more expensive for the city to borrow money for sidewalks, police cars, fire trucks, streets, and bike lanes, he said. The ratings also affect $500 million in city debt, and could lead to higher taxes, he said.
Fernandez touted some of his achievements as development chief: bringing IKEA to Long Wharf, rescuing the Shubert theater, bringing Pfizer to town, developing the Ninth Square.
“That’s what economic growth has to look like,” he said. The next phase of growth in New Haven will be development of a new business sector around the medical industry, he said. At Yale-New Haven Hospital continues to grow, other businesses will come with it, including doctors’ offices, testing facilities, drug companies, and hotel rooms. The question is whether this will occur in New Haven, or just outside of it, in the suburbs, Fernandez said.
Fernandez listed a host of other ways the city can promote economic growth, including supporting entrepreneurs coming from local universities, building up Union Station as a mixed-use transportation hub, improve schools, and cut crime.
In the short term, the city needs to abandon one-time revenues like selling streets to Yale, he said. He said, the city should also create a “coalition” with other towns to ensure the state fully funds its Payment In Lieu Of Taxes obligations to cities. And the city needs to “hold the line on spending.”
“This is absolutely already an emergency,” Fernandez said. “We’ve seen Detroit,” where “years of mismanagement” led to bankruptcy.
“I do not believe the city is facing imminent bankruptcy,” Fernandez later clarified. But New Haven’s “trajectory” needs to change to avoid Detroit’s fate, he said. “A city can simply fall off a cliff.”
“I would go through the budget and find cuts,” Fernandez said. “You do that in detail as mayor.”
Harp
“It really is a serious problem,” Harp said of the recent hits to the city’s bond rating.
She said the solution is to look at the budget and find savings. “We’re doing things we can’t afford to do,” she said. New Haven needs to reduce the size and cost of government, she said.
Harp said she’d look at “realistic consolidations” of city services. She said maintenance tasks are divides between the Livable City Initiative and the parks and public works departments, and that she’d look at combining those into one. She said she’d look for savings in purchasing and in information technology.
“I haven’t been able to get my hands on the budget in an in-depth way,” she said when asked for specifics. She said New Haven’s ratio of licensed and certified staff in the public schools is higher than other towns. She said she’d like to see why that’s so “out of whack” and whether she could find savings there.
Elicker
“I’ve been on the record many times talking about the city’s long-term fiscal situation and the fact that our budget is being mismanaged,” Elicker said. He said that as alderman he’s introduced a number of cuts to reduce the city’s debt, and attempted to increase the city’s fund balance.
“The fact that Detroit happened underscores the difficult decisions that we need to make as a city,” he said. The state and the federal governments are not going to give the city more money, he said.
In his four years as an alderman, “I’ve introduced amendments to cut the budget by $100 million. About $69 million have passed, all in the area of borrowing and debt service,” Elicker said.
Elicker said he stopped parking-meter monetization, cut school construction and new Board of Ed positions. “I’ve shown a willingness to cut in every area that we need to.”
He said the city needs to decide how much debt it can take on every year, and then work with that number, rather than first deciding what it wants to buy and then simply borrowing to do so.
Elicker also called for renegotiating pensions. “I was the only candidate who had the courage to tell the police union we need to reconsider the pensions,” he said. Read about that here.
At his morning press conference, Henry said Elicker is partly to blame for the city’s current financial plight, having voted for budgets that increase taxes and debt.
“Henry’s comment is garbage,” Elicker replied. “It’s as if Henry doesn’t understand how the budget process works. If the Board of Aldermen had voted no on the final budget, it would revert to the mayor’s original budget,” which included higher taxes than the one that aldermen approved after finding savings.
“I have been one of the strongest aldermen on the board for reining in spending,” Elicker said. “I’m being honest with what we can afford and how we can pay for it. Toni and Henry are not.”
Ross
Andy Ross, who’s running for Wooster Square’s Ward 8 seat, meanwhile, issued a press release calling for the city not to increase its borrowing. He specifically took aim at the practice of borrowing to pay off other debt.
“New Haven, like much of the country, has been on a borrowing binge because rates are so low. What they are missing is the fact that these rates will go up at some point. Even a 1 percent increase in our cost of debt will mean higher city deficits. We cannot keep taxing people and we cannot keep on selling off valuable assets to plug the hole,” Ross said.
“As alderman I will seek to put an end to the city borrowing more money to cover prior debt. We need to use our borrowing privileges wisely. If we use debt to invest in improvements to our city, then we will see incentives to start businesses here and new homebuyers wanting to live here; thus resulting in a higher grand list and the economic boost we so desperately need to get us out of debt.”
"I haven't been able to get my hands on the budget in an in-depth way," [Harp] said when asked for specifics. That's interesting. 418 pages is a lot, but I would have thought your campaign could afford to print it out and put it in your hands. Here's an assist:
http://www.cityofnewhaven.com/Finance/BudgetsFinances.asp