Thomas MacMillan Photo
As she unveiled a proposed $511 million budget, Mayor Toni Harp asked New Haveners to pay more taxes, so the city can move from short-term fixes to a “sustainable financial future.”
Harp (pictured) made her comments Friday morning in City Hall as she introduced her proposed budget for the fiscal year starting July 1.
The $510,795,912 general fund budget represents a 2.7 percent increase over last year’s $497.5 million budget. Click here to see it.
As predicted, the budget includes a proposed property tax increase of 1.56 mills, which means taxpayers would pay $1.56 more annually for each $1,000 of a property’s assessed value. The increase would bring the mill rate up to 42.36.
Harp said the mill rate increase would mean homeowners would pay $170 more per year for a house assessed at $150,000.
The budget now moves to the Board of Alders, where the Finance Committee will hold a series of public hearings and have the opportunity to make changes before a final budget vote by the full board.
Alders are expected to try to reduce or eliminate Harp’s proposed tax hike.
“Tax increases should be the last resort,” said Board of Alders President Jorge Perez. He declined to comment further on the budget until he has a chance to look at it. “We haven’t even received the budget.”
Alder Mike Stratton, who represents Prospect Hill and Newhallville, blasted Harp’s proposed budget as “completely irresponsible” and criticized the mayor for not asking for more money from the state.
“It’s truly nauseating,” he said.
Budget Highlights
Schools: Harp budgeted $178.7 million for New Haven schools, most of which is made up of state money. The proposed budget would increase the city’s portion — $18.3 million in the current year’s budget — by $1.5 million, significantly less than the $5.3 million increase that the Board of Ed requested.
Revenue Changes: The mayor’s budget predicts the city will bring in $11.1 million more in taxes in the next fiscal year than the current, and receive $4.8 million more from the state. Those increases would be offset slightly by a projected $1 million decrease to building permit revenue and a $1.8 million decrease to “other taxes, assessments and PILOTs,” or payments in lieu of taxes.
Expenditure Changes: On the expenditure side, the city would spend more on debt service (a $3.6 million increase), salaries ($2.6 million), education ($1.5 million), fund balance replenishment ($2 million), medical benefits and pension increases ($3.7 million total). The budget would cut $1.8 million, or 25 percent, from police and fire overtime spending.
The biggest departmental expenditure change — in percentage terms — would be in the mayor’s office, where the allocation would rise from about $900,000 to $1.3 million, an increase of nearly 50 percent. That’s partly because of six new positions the mayor wants to create in her office. (See below.)
In percentage terms, Youth Services and the Equal Opportunities Commission would also see large increases, of 40 and 55 percent, respectively.
Assumptions: Harp’s proposal assumes the state legislature will increased funding to New Haven by $2 million over the governor’s proposed budget and that payment in lieu of taxes from Yale-New Haven Hospital would drop by $781,000.
Capital Projects: The capital budget, which isn’t part of the $510 million general fund budget, would be $44.4 million, including
• $6 million for development of the former Coliseum site.
• $3.8 million for new public works trucks.
• $2.4 million for information technology upgrades.
• $2.9 million for improvements to Tweed airport.
• $1.4 million for the Shubert Theater.
• $5.7 million for education.
• $4.1 million for the redevelopment of the Farnam Courts public-housing development.
Positions Created, Eliminated: The budget includes a net increase of six city staff positions. Six positions — all currently vacant — would be eliminated and 12 and a half created. The eliminated positions include two from the finance department, a police department records clerk, a tree trimmer, a public works project manager, and an epidemiologist in the health department.
The new positions include:
• Six in the mayor’s office—a new grant-writing department, a legislative director, and a bilingual receptionist.
• An assistant city/town clerk.
• A half-time employee in the corporation counsel office would go to full time.
• A new accounts payable position in the finance department.
• Two new senior-center directors (funded at $1 pending grant funding).
• A food system policy director and a food system policy analyst (funded at $1 pending grant funding).
President Perez predicted that the creation of new positions in the mayor’s office will prove to be “a hard sell” for the Board of Alders.
5‑Year Plan: The budget includes a new “Five-Year Financial Plan” that would be funded by $2 million in fiscal year 2014 – 15. Of that money, $1 million would go toward rebuilding the general fund balance, $500,000 toward eliminating the deficit in the city’s medical self-insurance, and $500,000 toward creating a “pay as you go” capital projects fund. City budget director Joe Clerkin called the “pay as you go” fund an effort to pay for small capital projects with dollars on hand, rather than bonding for them.
Clerkin said the Five-Year Plan is part of an effort to build more long-term thinking into the budget. He called the plan a “work in progress” intended to start conversations about multi-year budget planning.
“The thought here was we’ve got to start to plan out,” Clerkin said. “You have to have a plan.”
“A Responsible Approach”
When she took office in January, Harp said, she found the city had been budgeting only for the immediate future, without an eye to sustainable fiscal planning. “We were surprised to learn about a laundry list of short-term solutions to mask longer-term difficulties.”
(Click here to read her full remarks.)
“The challenges we face – together – include a General Fund balance that is $600,000 in the red, the complete absence of a rainy day fund, and last year’s reduced credit rating to BBB+,” Harp said. “These three factors not only paint a dreary picture in terms of cash on hand, they make it more expensive for the city to conduct its business.”
‘Furthermore, the city has more than a half-billion dollars in unfunded pension liabilities, a self-insurance deficit of nearly $12 million, and aging facilities and rolling stock that need repair, maintenance, and replacement.”
Harp said her budget offers “a responsible approach to the current financial moment” while charting a responsible course for the future.
Because of decisions made in the past, the city faces a large number of fixed costs, which are rising, Harp said. Those include debt service, pension and medical benefits, and contractual salary increases.
Clerkin (pictured) said three-quarters of the $13 million increase to the budget is due to debt service, salaries, medical benefits and pensions. The last quarter is largely the increase to Board of Ed funding and the $2 million allocated for fund balance replenishment.
Clerkin said the budget has a high degree of “structural soundness.” The budget doesn’t rely on one-time revenues, like the sale of city property. Nor does it rely on potentially devastating long-term deals like parking meter monetization.
“Those things aren’t presented here, which is good,” Clerkin said.
New city Controller Daryl Jones (pictured) said the city needs to move away from always being in “crisis management” and engage instead in “strategic planning.” He praised the budget’s investment in information technology. Every $5 invested there results in $10 of savings down the road, he said.
Asked how she would convince a New Haven property owner to support the proposed tax hike, Harp said that while the city gets complaints every day about city services, it has fewer employees and older equipment than it did 20 years ago. Also, Harp said, “Our mill rate is lower than other towns our size.”
“We’ve got to be realistic” about what the city needs, she said.
New Haven’s mill rate is 40.80. (That’s $40.80 per $1,000 of assessed property value.) New Haven’s rate is lower than Bridgeport’s (41.86), Hartford’s (74.29), and Waterbury’s (56.98), but higher than in surrounding suburbs, such as West Haven (31.25), East Haven (30.95), Woodbridge (34.14) and North Haven (28.1).
“Completely Irresponsible”
Alder Stratton (pictured) lambasted the mayor’s budget proposal and listed a number of steps the city should take to avoid raising taxes.
“Raising taxes is the worst thing the mayor can do for job growth, business growth, and resident attractions and retention,” Stratton said. “And it is mind blowing that she would ask the governor for less money in PILOT than she needed to balance the budget. She apparently doesn’t want to offend governor Malloy by making such an ask but has no qualms asking taxpayers.”
Stratton criticized the fact that Harp is proposing a 25 percent cut to police and fire overtime while seeking an increase of nearly 50 percent to the mayor’s office budget.
“There is no reform at all in the budget. No combining of departments. No elimination of things we cannot afford,” Stratton said.
Stratton suggested asking the state for more money and eliminating departments that aren’t necessary. “The finance department is bloated,” he said. He said the city should cut the finance department budget by $4 million, and privatize elderly services and the health department. He said the city should also eliminate the Youth Services Department and delegate its responsibilities to the police department and to local youth organizations.
“I would then cut 10 percent from every department except fire and police and public works,” Stratton said. “I would deny any additional funding for education including the ECS match. They have enough.”
Stratton said he’s opposed to any new positions in the mayor’s office and to the elimination of the tree trimmer position.
“If we did all of this, we should be able to cut taxes by 1/2 a mill thereby attracting the very jobs and resident wellbeing that [Harp] crows about,” Stratton said.
“Mayor Harp has demonstrated a degree of selfishness here which is a slap in the face of every resident,” he said. “Raising her own budget 49 percent and making no hard choices. It’s truly nauseating.”
oh great more taxes thanks harp