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Tuesday night’s full board meeting.
Alders voted 27 – 1 to pass a new fiscal year budget that includes a 2.09 percent tax increase, a non-binding hope that Yale will increase its voluntary payments to the city by $2.5 million, and over $2 million in non-Board of Education operational cuts that City Hall must make wherever it can.
The full board took that vote Tuesday night during a special meeting dedicated entirely to the Fiscal Year 2020 – 21 (FY21) budget.
As City Hall remains indefinitely closed to the public because of the state of emergency around Covid-19, the hour-and-a-half long meeting took place online via the Zoom teleconferencing app.
The alders voted to approve a final general fund budget of $567,990,073 for the fiscal year beginning July 1. That’s $1,125,004 less than the budget that Mayor Justin Elicker originally proposed on March 1.
The only alder to vote against the final general fund budget was Downtown Alder Abby Roth. She told her colleagues that she couldn’t bring herself to support the final version primarily because of the inclusion of a $2.5 million “Revenue Initiative” line that strongly encourages Yale University and Yale New Haven Health to increase their annual voluntary payments to the city to help make up for property taxes they don’t have to pay as tax-exempt nonprofits.
“It is really risky to plan for the $2.5 million in the budget as guaranteed revenue,” she said. “We have no legal authority to require them to provide this amount.” (More on that below.)
The budget approved by the alders on Tuesday night represented an effort to find a middle ground between that initially proposed by the mayor on March 1 and that referred out of Finance Committee on May 13.
Elicker’s budget increased taxes by 3.56 percent. The Finance Committee’s increased taxes by 1.81 percent.
The final budget increases taxes by 2.09 percent, or by 0.9 mills, to a final new mill rate of 43.88. The mill rate represents $1 in taxes paid for every $1,000 in assessed property value.
The Finance Committee’s recommended budget ordered over $7.1 million in cuts on top of what the mayor had proposed. Those included only a $1 million increase to the Board of Education, rather than the mayor’s proposed $3.5 million. They also included $3.8 million in new cuts to “non-BOE operations” — meaning, every other area of city government not bound by contracts or required payments.
After the committee vote, the mayor spoke publicly about how that proposed reduction would almost inevitably result in layoffs.
The budget approved by alders Tuesday night preserved the smaller, $1 million increase for the BOE, but it reduced the non-BOE operational cuts from $3.8 million to $2,004,300.
Other differences between the Finance Committee recommended budget and the final approved budget included the elimination of a $150,000 parade expense fund and a $100,000 tree litigation settlement fund, both of which had been proposed by the Finance Committee.
The final budget also sets aside $4 million, rather than the Finance Committee’s recommended $4.8 million, into a reserve fund to help cover surprise expenditures and revenue shortfalls in the fiscal year ahead.
Many of the alders who spoke up in favor of the final budget on Tuesday praised it as a “compromise” document, while still recognizing the pain it will inflict on city residents through a mill rate increase and a likely reduction in services through operational cuts.
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Westville Alder and Finance Committee Vice-Chair Adam Marchand (pictured) said that the final amended version, just like the version moved out of Finance Committee, asks for painful sacrifices from taxpaying residents, institutional partners, and city staff alike.
Elicker told the Independent by email Tuesday night that he does not plan to veto the Board of Alders-approved budget. He also issued a statement after the vote.
“The City faced significant financial challenges when our team introduced the budget to the Board of Alders on March 1st,” Elicker stated. “Now that we confront COVID-19, those challenges have been exacerbated. The Board of Alders and I very much want to maintain service levels and keep taxes to a minimum. I believe the budget our team presented to the Board struck the right balance. It included significant cuts to personnel, eliminating or defunding 80 positions, departmental restructuring, significant cuts to important City initiatives, and a modest tax increase.
“The additional cuts by the Board of Alders tonight will be very challenging for us to implement and will undoubtedly impact City and New Haven Public School functions. Having been on the Board of Alders and now being Mayor, I’ve seen both sides of the budget conversation. While there are always more efficiencies to be gained, ultimately, the results of these cuts will mean our team will need to make very difficult and real choices that impact services our residents very much care about. I will be working with our team over the coming days to address these cuts to minimize their impact.”
Yale And YNHH “New Deal”?
The most discussed part of the amended budget Tuesday night was the $2.5 million “Revenue Initiative” line added by the Finance Committee and, ultimately, approved of by every alder except Roth.
The Finance Committee explicitly argued during its final budget deliberations earlier this month that that revenue should come from Yale University and Yale New Haven Health.
Edgewood Alder and Finance Committee Chair Evette Hamilton noted that dozens of members of the public turned out to public hearings on the budget over the past three months and called on the alders to step up the pressure on Yale and the hospital to contribute more financially to the city.
Elicker’s original proposed budget included $13 million in voluntary payments from Yale and $2.8 million from the hospital.
On Tuesday night, the alders preserved the Finance Committee’s $2.5 million “Revenue Initiative” assumption.
While the alders would certainly welcome increased revenue from a variety of sources to meet that line item, Hamilton said, “We wish to make it clear: We call on Yale University and Yale New Haven Health to step up.”
Marchand agreed. “The additional $2.5 million in this amendment is vital to this next fiscal year. But let me be clear: More needs to be done,” he said. “It’s time for a new deal from Yale University and Yale New Haven Hospital.”
“New Haven supports Yale in so many ways,” East Rock Alder Charles Decker as he too threw his support behind the budget. “We don’t need charity. We need partnership.” The university has an endowment of over $30 billion, he said, and the university and the hospital would have to pay upwards of $146 million in property taxes each year if not for their tax-exempt nonprofit statuses.
“New Haven’s greatest crisis is not a spending problem, it is a revenue problem.”
“These are two of the wealthiest nonprofit institutions in the country,” agreed Hill Alder Ron Hurt. Many constituents in Ward 3, he said, can barely makes ends meet. He said Yale and YNHH can afford to, and must, give more.
Click here and scroll down to read past responses from Yale President Peter Salovey and YNHH Senior Vice President Vin Petrini on why they don’t believe Yale and YNHH should have to increase their voluntary payments to the city considering the current property taxes they pay and the local philanthropic endeavors they support.
“Too Many Risks”
Downtown Alder Abby Roth.
East Rock Alder Anna Festa and Downtown/Yale Alder Eli Sabin expressed concerns about the $2.5 million revenue assumption. “For us to assume that they’re going to give us this $2.5 million is irresponsible,” Festa said. But the only alder to vote against the final budget outright was Roth.
She said that assuming such a voluntary contribution from these private nonprofits was just too risky for her to support.
Roth agreed that Yale and YNHH “completely have the means” to make such an increased payment to the city: “I too want and hope Yale and Yale New Haven Health contribute at least $2.5 million.”
But wanting something is different from budgeting that it will happen, she said.
She pointed out that the city and the alders have approved ambiguous “Revenue Initiative” line items before, most recently for $4.9 million for the current fiscal year. According to the city’s latest monthly financial report, the city has received $0 of that amount so far, and expects to receive only $200,000 by the end of June.
“The budget as presented creates too many risks,” she said. She said she would have preferred to eliminate the revenue initiative line and strike some other balance between increasing the mill rate and demanding more operational cuts from City Hall.
Roth cast the sole dissenting votes against both the final general fund budget and the final mill rate.
“This budget season really showed that we can work as a team,” Board of Alders President and West River Alder Tyisha Walker-Myers said after the final vote. She praised the Finance Committee for working collaboratively to incorporate many different perspectives into the document that was ultimately overwhelmingly approved by local legislators Tuesday night. “Now we have to continue to work for our constituents.”
Climate Task Force Funded; Vacant Positions Cut Or Defunded; Building Permit Bump
Some of the smaller items in the final budget singled out for praise by several alders included:
• $150,000 for the creation of a new permanent Commission on Affordable Housing.
• $150,000 for New Haven Works.
• $25,000 each for the Pension Task Force and the Healthcare Task Force.
• $50,000 for a new Climate Emergency Task Force.
• $100,000 for two new Stetson Library librarians for in anticipation of the opening of the new Q House next spring.
• $400,000 in anticipated new revenue thanks to an increase in building permit fees for commercial and mixed-use buildings over 10,000 square feet.
Largely unremarked upon Tuesday night were some of the more significant structural changes proposed by Elicker that were preserved in the final budget approved by the alders.
Those include the merger of the Youth Services department and one part of the Parks, Recreation & Trees department into a new Youth & Recreation Department, as well as the merger of the rest of the existing parks department with the current Department of Public Works, to create a new Parks & Public Works department.
They also include Elicker’s proposed elimination or defunding of roughly 80 currently vacant city positions, thereby reducing the number of budgeted police patrol officer positions from 289 to 266 and also reducing the fire department by 12 sworn firefighter positions. On top of those cuts, the alders outright eliminated four new fire department positions, three captains and a lieutenant, that Elicker said he had included in his original budget for union contract reasons.
The largest areas of the budget received a passing reference by Hamilton towards the top of the meeting.
“We thank the Elicker administration for proposing a sober budget that grapples with the serious challenges to our city’s finances,” she said, “which includes large structural commitments in pension obligations, employee benefits and debt services; high overtime costs in our police and fire departments; and a grand list with a large and growing proportion of exempt properties.”
Pensions make up $67.2 million of the budget, debt service $57.4 million, and employee benefits like health care $93.5 million.
Click here to watch a video recording of Tuesday night’s full board meeting.