Cuts Revealed; Econ Development Nuked

New Haven plans to get out of the small-business business, according to hot-off-the-presses details of emergency city budget cuts. The jobs of city workers like Clayton Williams are on the line.

The grisly details of just where the axe will fall started making the rounds Wednesday morning, as City Hall completed and released its plan for revising the coming year’s budget.

The city’s Small Business Initiative (SBI) and Fair Rent Commission would become history under the cuts. That means employees like senior SBI loan officer Clayton Williams (pictured) — who lost two previous jobs when city-based banks went out of business — are wondering whether they’ll have a job when the new budget takes effect July 1.

“I’ve been through this kind of situation before. I don’t necessarily like it,” Williams, who’s 59, said Wednesday. ​“If it is, it is what it is. I can’t do anything about it.”

Mayor John DeStefano announced last week that, because he had counted on receiving more than $10 million in state aid that never materialized, he was making deep cuts in his proposed city budget. (Click here to read about that.) The general cuts he announced included 102 layoffs, the closing of three police substations, curtailed library hours, refusal of shelter beds for adult homeless males, the elimination of a successful early-reading program, and the elimination of at least two city departments.

The identity of those departments became known in a new list of detailed cuts. SBI​’s $226,000 and Fair Rent’s $62,444 budgets are completely eliminated from the revised proposed budget.

The mayor’s office would cut its budget $109,000.

Click here to read all the details of where the proposed cuts fall.

The detailed plan arrives just as the Board of Aldermen’s Finance Committee plans to meet Wednesday night on the revised budget, then meet again and vote on it May 22. The full board is scheduled to vote on it June 2.

At least one constituency — neighbors in the Whalley/ Edgewood/ Beaver Hills (WEB) management team — are fighting to restore a cut, the closing of their Whalley Avenue storefront police substation. (Click here to read about that.)

In pure dollars, the schools take the biggest cuts: an estimated $3 million savings through hoped-for labor concessions, the elimination of a $2.3 million reading readiness program, and $1 million in other program cuts.

Percentage-wise, the hardest-hit departments appear to be economic development overall, the corporation counsel’s office, community services, and the Livable City Initiative (LCI). Besides eliminating the Small Business Initiative, the revised budget would slash the Economic Development Department’s non-SBI budget from 1,479,710 to 1,359,636. LCI​’s budget would drop 16.9 percent, from 1,265,407 to 1,050,407. although Mayor DeStefano said some positions may be preserved through federal block-grant money. Community services would see an estimated 10 percent budget reduction, corporation counsel, 15 percent.

DeStefano refused to adopt a defeatist outlook when asked about the cuts in a conversation in his office Wednesday morning.

“It’s like how people feel at home about not being able to go on vacation, send their kids to the school they want, or staying in their homes,” he said. ​“I feel like everybody feels. You feel anxious. You feel worried. But you just get through it. We’ll get through this” the way the city got through layoffs and emergency cuts in 2002, when then-Gov. John Rowland slashed the state budget more than halfway through a fiscal year.

“This is really about how do you fund government and what does government do,” DeStefano said. ​“The idea that the city can sustain healthy growth based on the property tax” is a myth. He said the answers will come in 2009 and beyond, in Hartford, as urban advocates push for property tax reform.

A Tough Business

In the meantime, the city will have to scramble to figure out how to meet its legal obligations and generally deal with multi-million-dollar construction projects as well as small businesses with much of its economic development apparatus dismantled.

It’s unclear which employees will lose their jobs. But SBI will be gone — and that agency, among other tasks, oversees loans, the legally mandated awarding of subcontracts to small businesses on construction projects, and, through Clayton Williams, a popular neighborhood facade program.

Meanwhile, the the 36 (and growing)-story tower is now under construction at the old Shartenberg lot at Chapel, State and Orange. Other major projects in town in or near development include Yale-New Haven’s cancer center, related residential-commercial buildings on nearby lots, and a purported condo, apartment or hotel tower (depending on what day you ask) to be supposedly built on the graves of small business booted from the block of College Street between Crown and George.

Details of the coming storm were still just trickling in Wednesday to SBI​’s and economic development’s suite of offices on City Hall’s sixth floor. Employees like Richard Yao (pictured), who began his job as an economic development officer in January, had no idea what the fates held for them.

Clayton Williams came to SBI in October 2006 and established a reputation as a go-to link to City Hall for small business. Williams spent decades in banking and economic development in Connecticut. He previously received pink slips when two separate banks, New Haven-based Connecticut Savings and Bridgeport-based CityTrust, collapsed in the early 1990s.

SBI chief Walter Esdaile said he didn’t want to comment on how officials will seek to preserve the mission and do the work without SBI​’s five staff positions. ​“The Board [of Aldermen] is going to deal with it,” Esdaile said. ​“Let’s wait and see what the board does.”

At his inauguration just five months ago, Mayor DeStefano identified economic development — especially retaining and nurturing small business growth — as one of his top priorities for his eighth two-year term. He said it was essential to find ways to grow the tax base in order to avoid future tax increases and provide local jobs.

However, fiscal reality, and the need to avoid further tax hikes amid a recession, led him to conclude last week that he needed to repackage a budget that unfortunately doesn’t ​“move the city forward.”

The city will increasingly be looking to a new private entity to pick up the slack in finding and retaining local businesses: the Yale-funded Economic Development Corporation. It’s just starting up now with a boss imported from Baltimore. Click here to read about that.

“We have a new partner” in the EDC, DeStefano said Wednesday. ​“I’m confident we’ll manage our responsibilities.”