Taxpayer Outrage Vented

Some expressed helpless frustration. Some shouted at alders. Others called for government transparency and more money from Yale.

After an hour, everyone agreed the city’s 11 percent tax increase is an outrage. Few specific ideas emerged on how to cut government instead.

Several alders present did put forward a detailed proposal calling on their colleagues to hold a hearing on a dozen specific budgetary recommendations made by the city’s independent financial review commission.

That was the scene on Wednesday night in the community meeting room at the Whalley Avenue police substation at 332 Whalley Ave., where over 50 New Haveners showed up to discuss, and vent, about city finances.

At the end of May, the alders approved an amended version of the mayor’s proposed $547.1 million operating budget, maintaining the original budget’s 11 percent tax increase for the fiscal year beginning July 1.

The alders subsequently passed an order, and overrode the mayor’s veto, to ensure that any additional general funds received by the city should be put towards reducing the tax increase. Meanwhle, many residents, and commenters in the Independent, have expressed outrage with both the legislative and executive branches of city government.

Wednesday night’s meeting arose from just such a comment thread discontent. The meeting was organized by Jacob Newell, a 33-year-old landlord who owns two three-family homes in Edgewood. He said he had been reading Independent articles about the budget, noticed extensive public concerns expressed in the comment threads, and decided he wanted to move the conversation from the virtual to the actual world.

Last week, Newell shared a link to an online petition in the Independent’s comment section in which he asked fellow readers and residents to sign on and express their frustration with the tax increase.

Newell said that in just under a week, the petition garnered 560 signatures.

Nadine Horton, the chair of the Whalley-Edgewood-Beaver Hills (WEB) Community Management Team and a fellow Independent commenter, offered her team’s regular meeting space at the Whalley Avenue substation for Newell and anyone else who wants to get together and talk about the budget.

“This is a demonstration of an outcry against a very large and very unjust tax increase,” Newell said on Wednesday night before the meeting began. He said the property taxes on his two Edgewood homes, one of which he lives in, went up by 18 percent after the 2016 citywide property reevaluation. He said an additional 11 percent tax increase starting July 1 would mean a nearly 30 percent increase in just two years. He said he had to pass some of that increase along to his tenants.

“You have to be really diligent and frugal with the money you get in,” he said about his concerns with city expenditures. He described the 11 percent increase as a ​“slap in the face to taxpayers.”

But when asked which specific areas of city government he thought should be cut, he demurred. He said he was at the meeting to listen to alders and fellow members of the public. He didn’t know specifically what needs to be cut, but he knew that something needs to change.

That sense of general frustration was a theme for the hour-long meeting. Although Horton kicked off the meeting by asking the group to focus on solutions and not to turn it into a ​“massive venting session,” some participants were intent on doing just that.

Tea Party Moment?

Newhallville/Prospect Hill Alder Steve Winter, one of four alders who voted against the amended budget that overwhelmingly passed the Board of Alders last month, provided the group with a brief update on the latest with city finances. He said the city is currently looking at a budget deficit for the current fiscal year ranging from $14 million, according to the city’s budget office, to over $35 million, according to the city’s independent Financial Review and Audit Commission (FRAC).

He explained how the city had initially proposed withholding $16 million from this year’s budgeted pension contributions and using that money to plug the deficit. But then the city backtracked on that idea, made the pension contributions in full, and has yet to come forward with any concrete plan on how the remaining deficit will be closed, even though Yale University has pledged an additional $2 million in its annual contribution to the city and the Parking Authority have agreed to send over an additional $2.5 million.

“This likely means the city will end the year with a significant deficit,” Winter said. He said closing the books on a budget that is out of balance could have serious implications for the city’s credit rating.

That’s when New Haven lawyer and Westville resident Anthony Wallace jumped in. Pointing his finger across the room, he said he did not show up to the meeting to listen to alders make excuses for themselves. He said he didn’t know which alders had voted for the budget and which hadn’t, but he didn’t care.

His proposed solution for resident frustrations with higher taxes? ​“Appeal every tax bill you get” and clog up the appeals system.

His was the first of several outspoken comments that called to mind the 2010 Tea Party movement that focused exclusively on reducing federal spending and voting out Democrats and moderate Republicans who refused to comply.

Joshua Rose, a local accountant who is the endorsed Republican candidate this year for the 92nd General Assembly District seat, suggested that residents consider not paying any city taxes at all.

Dennis Serfilippi called on residents to vote out all alders with any affiliation with the UNITE HERE unions at Yale, as he alleged that alders’ connections to the unions had resulted in government bloat.

“Put the taxpayers first and the union second,” he said.

Gary Doyens, a budget watchdog who regularly shows up to aldermanic Finance Committee meetings to voice his disapproval of what he sees as bloat in city government, proposed over $10 million in cuts at an aldermanic budget hearing this year.

“The problem is they don’t listen,” he said. He called on residents to hold alders accountable for their votes, force them to listen to public concerns, and be more transparent in their decision-making process.

Besides Doyens’ reference to his previous list of proposed cuts, which focused on reducing staff in the police department and the fire department and canceling the planned Escape teen center, none of the most vocal critics identified any specific areas in city government to cut.

Tania Giacomini, a single mom from Morris Cove, said she works four jobs to pay for her child to go to private school. She summed up the sense of helpless discontent that some members of the meeting expressed, albeit in a much more modest and conversational way than some of the louder critics.

“We just can’t get our heads above water,” she said. When asked what substantial cuts need to be made to city government to reduce what some critics saw as bloat, she replied, ​“I don’t know, but we need to start cutting.”

Not all of the public discussion was devoted to bashing city government. Liam Brennan, a staff attorney at the New Haven Legal Assistance Association (NHLAA) and a former assistant U.S. attorney, told the group that New Haven spends only around $4,300 per resident on average, which, he said, ranks 42nd among all cities and towns in Connecticut.

“There are spending problems,” he said, ​“but there is also a funding problem.” He said the city struggles to raise as much revenue as other Connecticut cities in towns primarily because over 50 percent of its property is owned by nonprofits like Yale University and Yale-New Haven Hospital (YNHH), and is therefore nontaxable.

He said New Haven should consider adopting ​“user fees” to shift some of the financial burden from city residents onto nontaxable local institutions that nevertheless use city services. He noted Ithaca, N.Y. as an example. Ithaca recently implemented a ​“Stormwater User Fee” that will allow the town to collect over $130,000 from that town’s major untaxable institution, Cornell University. (New Haven hotly debated that idea in 2011; it died.)

When someone in the crowd shouted about alleged bloat in the Board of Education budget, Brennan said he is a parent of a New Haven Public Schools student. He said he has been asked to bring toilet paper to his kid’s school because the school doesn’t have enough money for supplies.

Alders Are People, Too

Some alders present, like Beaver Hills Alder and Board of Alders Majority Leader Richard Furlow, tried to mitigate some of the public outrage by emphasizing that the alders had not voted to approve the mayor’s budget as initially proposed. They had voted to approve an amended version that, he said, had sounder financial assumptions.

The budget approved by the board took a $5 million increase the mayor had proposed for the Board of Education (BOE) and put that money instead towards the city’s underfunded healthcare account. It also voted to create a pension task force and a healthcare task force to investigate how the city should handle two of its greatest liabilities going forward.

“If you’re asking if I voted for the mayor’s budget,” he said. ​“The answer is, no.”

He also stressed that the alders are residents, too, and will be affected by the tax increase just like everyone else in the city will. He said he had been planning to purchase a home in Westville, but, because of the tax increase, had to pull out of the deal because he could no longer afford it.

“Our effort is to maintain services to our community,” Edgewood Alder and Finance Committee Chair Evette Hamilton said in a brief speech towards the beginning of the meeting. But she also stressed that she would be hit by the increase. ​“The tax increase affects me, too.”

Furlow, Winter and Downtown Alder Abby Roth all encouraged residents to show up to the next aldermanic Finance Committee meeting on July 9 and the next FRAC meeting on July 17 so that residents can be as informed as possible on city finances.

“You’re not alone in your frustration,” Winter said.

Justin Elicker, the current director of the New Haven Land Trust and a former East Rock alder and 2013 mayoral candidate, said he wasn’t surprised by the level of discontent he heard at Wednesday night’s meeting. He said he had long been concerned with structural problems with city pensions and debt service.

However, he questioned whether Wednesday’s meeting was the most productive format for coming up with potential solutions to the city’s budget problems.

“You hear a lot of blame on the Board of Alders,” he said. ​“It’s very hard as a volunteer and as a layperson to make the right decisions.” He said the pressure instead needs to be put on the mayor’s office.

Jacob Newell, the organizer of the event, wound up not saying a word during the entire meeting.

“That was intense,” he said after the crowd had left. ​“There was way more vocal frustration than I anticipated.”

Horton told the group that anyone interested in holding a follow up citizen-led tax increase discussion session should feel free to organize it themselves. She also exhorted them to show up at City Hall to learn more and voice their complaints.

“Everyone in this room should be at the Finance Committee meetings,” he said.

A Detailed Proposal

Almost, but not entirely, overlooked during the meeting were copies of two aldermanic communications that Roth handed out. It called on the board to convene hearings on specific potential budgetary solutions initially proposed by FRAC, the independent financial review panel. Roth said both communications had been submitted to Board of Alders President Tyisha Walker-Myers, and will come before the full board as communications during the July board meeting.

Click here and here to read the two communications in full.

The first communication calls on the board to convene a public hearing with FRAC in which the independent financial experts who comprise that commission have a chance to testify on the record and expound on their recommendations for changes to the city budget and financial management.

It also calls for the appropriate aldermanic committee to hold public hearings on a slew of FRAC-specific recommendations, including:

• Establishing a check register that would display on the Finance Department’s website a monthly list of every dollar the city has spent.
• Ensuring that any savings or revenue from bond refinancing, refunding, or premiums be amortized equally over the life of the bond issuance, and not be counted as a windfall of revenue in any given year’s budget.
• Evaluating the advantages and disadvantages of working with the state’s Municipal Accountability Review Board (i.e. trading some control over local decisions in return for state financial assistance).
• Having the Corporation Counsel evaluate the impact that filing for bankruptcy would have pensioners, employees, taxpayers, bondholders, and residents.
• Conducting independent cost studies of the police and fire departments to determine how they can operate more efficiently.
• Requiring the new pension task force to look into the cost of pension fund active investment fees; the potential benefits of more passive investments; the risks and benefits of pension obligation bonds; putting a cap on annual pension payments at $90,000; suspending pension benefits when a retiree returns to a public job; and pension buyouts, among other considerations.

The communication is signed by Roth, Winter, East Rock Alder Anna Festa, and Downtown Alder Hacibey Catalbasoglu.

“We request that the discussion focuses on steps the city can take to stabilize and improve its public health,” the communication concludes, ​“a matter of great concern to the citizens of New Haven.”

The second communication, co-signed by Roth, Winter, Catalbasoglu, and Newhallville Alder Kim Edwards, calls on the board to direct the Corporation Counsel’s office to explore the possibility of New Haven setting up a ​“community support organization that can accept charitable contributions for the benefit of the municipality.”

The communication cites a new federal law that imposes a $10,000 cap on state and local tax deduct, as well as a new state law that allows Connecticut municipalities to establish community support organizations that can accept charitable contributions for the city and be the basis for a credit and the city’s property tax.