Opinion: Tap Yale Rather Than Slash City Budget

Not. Gonna. Happen.

If you want the University to pay more taxes, change the laws.

Yale has a surplus because they have managerial staff who actually have a clue as opposed to those elected by the residents of this city for the last 60 plus years. elections have results and electing democrat mayors for the last 60 years have put the city i grew up in on the brink of bankrupcy. the residents need to think long and hard the next time they go to the voting booth although it may be too late but for anyone from any party to turn the city around. maybe the state legislature can bail them out like they did Hartford.

Does anyone know how many of these four authors actually live in New Haven and pay taxes in New Haven?

Yale's thinking is measured in generations while the city's is measured in election cycles. Yale was threatened in the 70s/80s when they realized their fortress was too small. They responded by buying a commercial moat around the campus downtown. They've since been expanding that moat to Newhallville and the Hill. Why bother with public policy when you can simply engineer the society you want through rental contracts (via their property management arm, of course). If anything, New Haven's fiscal distress is creating a buyer's market for Yale. Take a guess who benefits from a decline in property value and fire sales on buildings. Remember when the city sold a portion of College Street? All they have to do is wait for the city to continue it's decline and they can go on a shopping spree.

Has the city thought of investing in cryptocurrency? Bitcoin, Ethereum and other defi projects are still in their infancy and can be used as collateral and/or to earn interest.

The problems of this city's finances go beyond Yale and their contribution. Yale pays the PILOT amount and New Haven is supposed to get 77 cents on the dollar but only receives 33 cents or less. Yale helps employees buy properties in certain areas of the City- find another employer who does the same thing. Yale contributes through initiatives throughout the City including parterships with the schools. Yale employes thousands who contribute to the economy in various ways. As for Yale's Endowment much of it is restricted- it's not money that can just be pulled out to fulfill the City's finances and the return on the Endowment has to go to the purposes for which the Endowment is stated. So how can New Haven do better? First talk to Yale about increasing its voluntary contribution- it might yield some money but not what the City wants. Second require the PILOT to be funded according to agreements- and if the City is to get 77% of Yale's contribution it should get 77% and not 33%. If nonprofits aren't contributing then make them contribute. Change the laws to allow certain taxation- make the nonprofits pay the motor vehicle tax which goes directly to the cities (NGO nonprofits only - otherwise you are pulling from one pot to another). Maybe allow taxing of the nonprofits instead of PILOT- it can be determined later but taxing at the current mill rate would not fly. The City can do its part too- finding savings in various areas that may work out. Negotiate on pension and benefit costs. Look at how much the BOE pays principals, etc. Find a way to help educators in return- maybe allowing housing costs to be pre-tax as clergy receive now. There are ways to make this work- it's just everyone needs to work together rather than against each other.

Yale's endowment is irrelevant. You can't simply take money that is earmarked to develop global cures for malaria and AIDS and use it to trim trees in New Haven instead.

If the state attempted to tax Yale in that way, it would need to transfer large parts of its endowment to one of the 49 other states or 200+ countries that don't tax endowments that are dedicated to fight malaria and AIDS.

Yale should pay more for city services, perhaps through innovative mechanisms like stormwater and traffic management taxes. However, it is also true that union leaders should stop lying to their members about the idea that Yale can give away its endowment to whoever they want to.

wvilleconcernedres: There is no agreement to fund PILOT at 77 cents on the dollar. The statute sets certain percentages as aspirational values, but these are subject to appropriation. Although New Haven pre-existed the state, it is legally considered a creature of the state. The can give, or not give, the city whatever the state wants. The existence of the PILOT program is up to the state, and the state alone. Yale's tax exemption, on the hand, is considered an agreement, one which cannot be changed simply by the state alone, but, like any contract, requires the consent of both parties.

A quick search of ct public voter records seems to show that 3 of the 4 authors of this letter live outside of New Haven. Two live in Hamden. Now Hamden has some very serious financial issues as well. You would think they'd be concerned with Hamden too. But Yale doesn't have a large presence in Hamden. So, what is the reason for Hamden's fiscal mess and what is there solution for Hamden?

Meanwhile, the City continues to appropriate a Capital Projects budget, $66mil this year equates to an additional $3 mill in next years budget. Didn't Harp's administration do a two year capital budget to "save" money, there was a capital budget last year and then again this year, there was not an off year. Didn't the BOA pass a resolution some time ago limiting the amount of borrowing to the amount being retired in that years budget? The State created the problem with funding the pilot. The BOA approves the mess left behind.

Let's be clear - these unions are part of the problem, not the solution. As they do with the city, they demand the money of other people to fuel their demands. This city is not and has never operated on an austerity budget. It wastes money at every turn - remember former Mayor Toni Harp and her entourage, including the current BOA President Walker Meyers' trip to China, an expense that approached some $100K.

Or how about the more than $10K spent removing the Columbus statue from Wooster Square; or the $600K pension sweetner given the former fire union president Ricci; Or, consider the austerity negotiations just negotiated with the fire unions that not only gave back previous concessions, but actually enhanced the city's healthcare costs and healthcare deficits but covering their spouses for life too.

Consider that no program the city runs is held to account for results or success/failures and not one person is either. Nobody is being fired for the poor maintenance of the city's $2 billion in new schools and now repairs far exceed what routine maintenance could have prevented. Consider the city's repeated use of scoop and toss financing that provides short term debt relief but escalates payments and debt service just a few years later, ironically, one of the contributing factors to the current and projected deficit.

Consider the fire contract that mandates a staffing level; a practice of rolling fire trucks to every incident with a full compliment of employees even though it's a medical call for which the city will be transporting nobody. It results in massive uncontrolled overtime in the millions of dollars - or to do the math, at a rate of some $100K per week, and a significant driver in higher pension cost. Consider the repeated erosion of the city's tax base, approved by the mayor, staff and the BOA.

Yale is not the problem. The union controlled BOA is; the union controlled mayor is. Be honest. Absent that, KMA.

"Yale's endowment is irrelevant. You can't simply take money that is earmarked to develop global cures for malaria and AIDS and use it to trim trees in New Haven instead." This is such an insane response to calls on Yale to pay its fair share. Absolutely no one ever suggested this and it is nonsense.

By all means, Yale should be transparent and disclose how much of its endowment is tied up in specific mandated uses.

But we don't even need this information to understand that Yale has tons of surplus wealth. Nearly every year Yale's operating surplus is enough to cover its tax obligation. Nearly every year Yale under spends its own spending rule and still ends up with a massive operating surplus. Moreover, Yale is currently engaged in a massive capital campaign. It could easily use this fundraising prowess to benefit and transform the city.

The fact that leaders at Yale do not contribute more to New Haven when their tax-exempt property costs the city so much is a choice that the leaders are making. They are making this choice when our city is in crisis and families are going hungry.

Bev, I agreed Yale should spend more. It's just irrational to say they can spend their endowment for malaria research, though. I would dispute some of the statements you made about how much of a surplus there is. Even the Mayor said something like Yale spends $300,000 per student while the city spends $4,000 per resident. Such comparisons are inane. Yale can't take a portion of that $300,000 per student and use it for anything other than malaria research if that's what it is restricted for, for example.

Let's move past that and have a rational conversation about taxing commuters, real estate, stormwater use, and the salaries of workers at Yale and many other large businesses (including government) that earn six-figure salaries. Raising income taxes on professors, prison workers, physicians, lawyers, and bankers earning $150,000 or more would go a long way towards fixing the financial issues in our state.

Everyone has a opinion, but here these opinions come from Union leaders who do not pay taxes in NH, and who offer these over implied Yale to city contributions in order gaurentee a stronger position from which to negotiate with both Yale and the city for raises, which includes increases to salarys, pensions, health benefits and other paid benifits like overtime.
It is not Yale who sells city property and streets to the city to balance an annual budget, it isn't Yale who reassess Yale property from taxable to non taxable education use, example, 25 science park, taxable for 8 years suddenly in 2018 becoming education use, costing the city $25m I'm taxes.

Yale is no $aint as they project themselves as a benefactor to new Haven, but history shows the city has been there own worse enemy.
Just who but New Haven citizens would sucker up because all signs into New Haven say.....Welcome to Yale at New Haven??

Anonymous,

No one is suggesting that Yale diverts money from Malaria or AIDS.

"I would dispute some of the statements you made about how much of a surplus there is." What? I'm stating historical facts. Yale posts an operating surplus nearly every year. It consistently under spends its own very conservative spending rule.

The argument that you are advancing is disingenuous. I'm not accusing you of being disingenuous because the argument is just based in Yale's talking points. But, if Yale wanted people to actually take this argument seriously they should be transparent about how much of the endowment is tied up in earmarked uses.

They should explain why they can't fund raise for New Haven with more than symbolic goals, when they are raising billions of dollars for their own institution.

They should explain why they are deciding to not do more of a city in crisis, when their tax exempt property costs the city so much.

It is also worth commenting on this quote: "it is also true that union leaders should stop lying to their members about the idea that Yale can give away its endowment to whoever they want to."

Union leaders are not saying Yale should give away its endowment but rather pay its fair share.

Calling union leaders liars without any evidence that they are lying is defaming these leaders and draws on some of the worst right-wing traditions in our country.

Yale's operating surplus last year was $87 million, or 2% of its $4.2 billion budget. $77 million of that surplus was generated by the medical center. Every well-run organization runs an operating surplus nearly every year. Those that don't, such as St. Ray's, wind up closing.
Donors generally give to causes with which they have an affinity, or a personal feeling. Yale does offer its annual fund donors an opportunity to direct their donation to New Haven, but most want something either more specific, such as the Sifka Center, or broader, such as scholarships open too all. If they are interested in problems like New Haven as, they can likely find them closer to home, funding, say, a homeless shelter in NYC or Houston rather than New Haven. Like Ray Dalio, they also want some control over how their money is spent. That does not happen when money goes to governments (as the Dalios found out).

BevHills, at a recent New Haven rally one of the leaders said "this wealth is our wealth." On the issue of income on the endowment (or a sales tax), sure, let's tax investment income and purchases if it makes sense to do so. Much higher statewide or national taxes on investment income and luxury goods would raise trillions of dollars, from corporations, nonprofits, lawyers, and many union members alike, and are a great idea. But 90% of the endowment is held in individual accounts, so it's not like the endowment or the spending from it itself can be used in the way that union leaders claim, and the suggestion that it can is harmful (sure, more of a constantly repeated misrepresentation than a lie). By misrepresenting and not talking rationally about this issue, Mayor Elicker and the union leaders are hurting the causes that we all support.

Christian Bruckhart: What portion of College Street did the city sell Yale? Yale got Library Street about 100 years ago, and portions of High and Wall Street about 30 years ago. Yale has a long term lease on the Broadway parking lot, which is much better since Yale got it. The city might do well to sell Yale Gilbert and Liberty Streets, as well as Wall between College and Church, and High between Elm and Chapel. Yale did buy, at depressed prices, and at the city's request, the FDIC properties on Chapel and College which were decaying after Schiavone abandoned them. More recently, Yale seems to be paying a premium for properties on its campus, such as the burnt-out hulk near Chapel and York.

1644: my mistake, it was parts of High and Wall, in 2013.

It's not just about Yale and New Haven. That such a small part of the state wide issue. It's about the entire state of CT and how it's cities and towns tax and fund and budget. It's about zoning land uses and mill rates and tax exempt properties and the entities that provide services. it's about what can be taxed, and what can't be taxed, and who is hosting the entities providing social services, government services, and public use entities that everyone in the each of the counties and state uses and needs to have provided. It's about the Pilot program percentage of funding, and regionalization for reducing duplicate administrations and services and sharing costs. It's about what is good for each county as a whole and the state as a whole. You can try to get Yale to contribute more, but that doesn't help Hamden, West Haven, Bridgeport, Waterbury, Meriden, New London, Hartford or the small rural towns that don't have taxable income outside of raising property taxes to fund their government and services. CT needs to rethink everything about the current system and find a way to make it work for every community to have their needs met and services funded and to be taxed equitably and to reduce disparities and segregation. Stop thinking small and look at the big picture, folks.

Heather C is absolutely correct. Yale is smart enough to know that, even if it could give $100 million more to New Haven (as I'm sure it would love to if it could), the State of Connecticut the very next day would consider equity and simply reduce New Haven's budget by a corresponding $100 million in order to give that windfall of money to places like Bridgeport, Waterbury, Hartford, Ansonia and New Britain that would need it so much more. New Haven would end up exactly where it was before the Yale gift came in.

Anonymous,

90%? Care to explain where that number comes from or are you just making another unsubstantiated claim to malign union leaders.

Also note even if this is true, then there would still be enough capital for Yale to pay for the entire cost of its tax exempt property on interest alone and have tens of millions if not more left over in interest earnings.

The leaders of Yale are making a choice to not do more for their city even when suffering here is so deep and widespread.