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Harp: “A huge shock.”
New Haven cleaned up at the Capitol, collecting $8 million more than last year from the state despite a budget crisis.
New Haven got creamed at the Capitol, collecting $8 million less than promised.
Both local perspectives on the tentative state budget deal are factually correct. State Democratic legislative lawmakers reached the deal with Gov. Dannel P. Malloy this week before close late last night of the legislative session. Legislators plan to reconvene in a special session next Thursday to vote on the deal.
State Senate President Martin Looney of New Haven offered the perspective that the city made out well in the deal.
Legislators were closing a projected $960 million deficit in the budget previously approved for the fiscal year beginning July 1. So they had to make drastic cuts. (The governor put any tax hikes off the table.)
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Looney: Cities still got a boost.
“At a time when we were cutting the budget across the board in such painful ways for everybody, we increased aid for the major cities by substantial amounts,” Looney said in an interview Thursday.
New Haven will receive a total of $227 million in the deal, up from $219 million last year, he said. He said that equals the rate of growth in municipal aid to New Haven in years when the state did not face a budget crisis.
“Other cities lost money from previous years” or emerged with no increase, Looney said. “We took care of the larger cities because of greater need.”
To New Haven Mayor Toni Harp, the budget deal “penalizes” New Haven for responsible budgeting and has her team scrambling to find ways to plug a gaping new last-minute hole in the proposed $525 million new fiscal year budget in the last stages of public approval.
In putting together its own proposed new fiscal year budget, the Harp Administration had counted on a $15 million increase in payments in lieu of taxes (“PILOT”) alone for the coming year; that was contained in the original version of the upcoming state budget, before state lawmakers revisited the budget in the face of cratering tax revenues. Harp recently predicted the budget changes would require her staff to possibly have to make up a few million dollars under the worst-case scenario; she didn’t expect to see $8.1 million disappear. She said the $8.1 million includes cuts in the promised PILOT increase as well as in budgeted educational cost-sharing and school transportation support.
Asked if the new budget hole means taxes might rise (her proposed budget included no tax increase), Harp said it’s too early to tell. While directing her budget staff to draw up new plans to cover the hole, she’s also hoping that New Haven lawmakers can succeed in restoring some of the money next week.
Harp, a former state senator, said Bridgeport and Hartford’s aid was cut less in the budget deal — because, she argued, they haven’t managed their finances as well as New Haven has. Unlike New Haven, which has had a balanced budget, those cities have wrestled with fiscal crisis this year; Bridgeport’s total budget deficit (including schools) is around $30 million, Hartford’s $32 million.
“We’ve been responsible — not just my administration, the DeStefano administration,” Harp said. She said most city departments have gradually cut their budgets by 30 – 50 percent in recent years: “We’re not overstaffed. Im some places, if you cut [now], it actually costs you more money: If you cut police or fire, you end up because of contracts paying more [in overtime]. We’re in a position where we’ve already done the responsible thing, reduced government.
“We have done what everybody sasy you need to do. We have reduced government. Our reward is to have to pay more,” Harp said. “This comes as a huge shock. Something that’s going to be difficult to fix.”
In the end, based on the pending budget deal, Hartford and Bridgeport and New Haven all had 3.4 – 3.6 percent increases in overall in municipal aid from the previous year, Looney said. “Hartford always gets more aid than everybody else because their poverty is greater than everybody else’s. But there was a rough equivalence.”
Earlier versions of proposed new budgets by the governor and the legislators had the city losing a few million dollars, then $6 million, said New Haven State Rep. Juan Candelaria. He said legislators in caucus had to make compromises to win support from colleagues in hard-hit towns.
“We’re still pushing,” Candelaria said. “We’re still negotiating. We’re still working on trying to ensure that New Haven receives a bigger share of the dollars.”
Yale’s Taxes To Be “Studied”
A controversial bill to reexamine a circa 1834 special tax exemption the state grants Yale for mixed commercial-academic buildings never ended up coming to a vote in the legislative session. It fell short of winning enough support to pass, noted Looney, who championed the measure, Senate Bill 414. Yale lobbied hard against it; Gov. Malloy threatened to veto it. (These stories give background on the controversy.)
Looney said supporters had planned to substitute a bill to create a task force to study how other states — notably California, home of Stanford; and Massachusetts, home of MIT — “study the issue of how technology transfer from unviersity-based research is dealt with at the point at which taxability occurs.” Those states have more experience with the issue, because Stanford and MIT started earlier than Yale in aggressively promoting spin-off commercial development of scientific discoveries.
The bill proved unnecessary: the Malloy administration announced it will “convene a working group with Yale to study the issue.”
Budgeting Responsibly Notes: