Tax Hike Cut In Half

By eliminating some proposed new mayoral staff, factoring in new Yale building permits, and flat-funding the Board of Ed, alders managed to cut the mayor’s proposed tax increase by more than half.

That happened during a five-hour Finance Committee meeting Wednesday night.

The committee made several amendments to the mayor’s proposed $511 million budget, which included a 3.8 percent tax increase. The changes resulted in about $2.5 million in cuts, and about $2 million in new state and building permit revenue, all of which was put toward reducing the mill rate, which determines the size of property tax bills. The tax hike would now be 1.8 percent.

The amendments were all put forward by Board of Alders President Jorge Perez.

Newhallville/Prospect Hill Alder Michael Stratton put forward several pages of amendments of his own, proposing dramatic cuts to education spending. He found the support of only East Rock Alder Anna Festa, not enough to pass his proposals; but other alders said that structural budget criticisms he raised will become part of the legislative debate going forward.

The budget now heads to the full board for a final vote at a special budget meeting on May 27, when further amendments can be made. The budget takes effect July 1, when the new fiscal year begins.

Here are the changes alders made at Wednesday’s Finance Committee Meeting:

• Alders first passed an amendment proposed by Alders Perez (pictured), Jessica Holmes, Al Paolillo, and Jeanette Morrison. The amendment eliminated four new positions Mayor Toni Harp had included in her budget: a legislative director and three staffers for a new grants office. The budget still includes three other positions she requested: a bilingual receptionist, a grants director, and a head of a new small and minority business initiative.

This amendment also reduced the line items for fire and police departments salaries, based on the fact that new classes of recruits are being seated later than expected. 

All together, the amendment would save $740,668

• The same alders then proposed an amendment reducing workers compensation by $250,000 and eliminating a $1.5 million increase to education funding. On the revenue side, the amendment added $2 million for building permits, based on the fact that Yale will begin building new residential colleges this year; $50,000 in fines to be collected by the Livable City Initiative; and over $2 million more coming from the state for payment in lieu of taxes (PILOT).

All together, this amendment would free up $4,128,899 to go toward tax reduction.

• Alders made a number of technical changes to the proposed budget. These largely included changes to the salaries for positions that were not yet filled when the mayor drafted her budget. Those changes increased the budget by $64,172.

• Alders voted to create a ​“master lease” program that would allow the city to rent — instead of buying — some of the new equipment included in the city’s capital budget. The amendment means the budget would include $500,000 set aside to pay for leasing new public works, parks, traffic and parking, and fire equipment. The change means the city would borrow $2.8 million less than initially proposed.

• Alders voted to take $1 million of the proposed new bonding in the mayor’s budget and put it toward needed repairs to city youth centers.

• The committee also agreed to borrow $2 million to start to pay down debts of some $8 million for lawsuits lost by the city.

• In a first for the city, alders voted to approve a line of credit for cash flow purposes. Because the city’s fund balance is so low, Perez explained, ​“the city is having serious cash flow issues.”

The city receives money from the state and PILOT from Yale, but those and other revenues don’t come in one lump sum at the beginning of the year. Meanwhile, city expenses have to be paid every week.

Perez said he thinks the Board of Alders should impose some restrictions on the short-term borrowing program. For instance, if the state borrows to pay bills, expecting PILOT from the state, when the PILOT comes it should be used only to pay back the borrowed money.

Perez said those restrictions can be added at the full board meeting, through a policy amendment.