Elicker: Details coming Monday.
Saying he’s following through on a promise to make tough decisions to restore fiscal order, Mayor Justin Elicker plans to propose a tax increase along with spending cuts in his first city budget.
He revealed that plan as he took a shot as his alma mater for not helping the city more with its financial woes.
Elicker revealed the taxplan during a talk last Friday at a conference at his alma mater, the Yale School of the Management.
While he won’t recommend any layoffs, he will propose slashing “a lot” of vacant positions in city government.
The mayor subsequently confirmed the remarks in a conversation with the Independent. He said he is tackling deep financial problems with his proposal, which he must formally submit to the Board of Alders by Monday for review.
Before then, Elicker said, he won’t divulge details of the proposal, including the amount of the proposed mill rate increase.
But he did say that the amount of money he proposes cutting from the budget is “much larger than the revenue” gained from the proposed increase.
In last year’s mayoral campaign, Elicker criticized then-Mayor Toni Harp for having successfully proposed an 11 percent mill-rate hike in 2018. Elicker called the hike too high. He also criticized the mayor for avoiding tough long-range fiscal decisions by, for instance, refinancing $160 million in debt through a process known as “scoop and toss,” under which the city gets extra millions in cash up front to spend on operating expenses that future administrations must pay back later with interest.
The current mill rate is 42.98. That means that homes and cars are taxed $42.98 on every $1,000 of assessed properties (which is 70 percent of appraised market value).
Elicker was asked about how his proposal squares with his criticisms of his predecessor.
“People elected me to make difficult decisions. This year we have significant budgetary challenges,” he said. “I am addressing those challenges head on rather than putting hopeful line items in the budget, rather than refinancing our debt, rather than making one-time sales that plug a budget hole in this year but pass on our problems to future years.”
He argued that Harp “raised taxes in one year 11 percent and refinanced our debt: That’s not an effective way to get the budget under control.”
In preparing his budget proposal since taking office Jan. 1, Elicker instructed department heads to submit scenarios for cutting their budgets by 3, 6, and 10 percent.
In emails and public statements in recent weeks, he began preparing the public for a possible tax increase and painful budget cuts by referring to the city’s dire financial straits.
Yale’s “Defining” Moment
Elicker’s public disclosure of his tax-raising and budget-cutting plans came during a keynote address and heated question-and-answer period at the end of an SOM conference on data and development. (Click on the video for excerpts.)
Noting that Yale had an annual operating surplus of $91 million last year, the mayor argued that the university should be contributing much more than $12 million annually in voluntary payments to the city.
He made both an ethical/moral and a practical argument for Yale to up its financial contributions. (Yale argues that it offers more than similar institutions in voluntary contributions to its host city and notes that it’s New Haven’s largest employer.)
“Does Yale University want to be in a city where our taxes continue to rise and we are unable to fund the very things we want to fund because we can’t attract people because our taxes are so high?” Elicker asked the audience.
“It has to do with what is ethical and right. The response I think would be: Let’s grow.”
Without more revenue, Elicker argued, the city can’t grow — or take care of some basic needs. The grand list grew by just 0.5 percent last year, he said — hardly fast enough to close what he characterized as a $40 million budget gap he inherited.
He took sharp questions from the audience about how taxes are lower in Cambridge, where the state doesn’t send payments in lieu of taxes for property owned by Harvard. Elicker called that a false comparison for a variety of reasons, beginning with the far higher median value of homes in the Massachusetts college town.
“I think this is a defining moment for us all,” Elicker remarked. “I will be presenting a budget that shows that the taxpayers have done their part. It shows that our municipal employees who have lost many positions — I’m not laying off people, but I will be eliminating a lot of vacant positions — municipal employees have done their part.
“The remaining groups that have to do their part are the university, the hospital, and, I believe, our state. You all need to raise your voices and say, ‘We bear responsibility as a community, as a university, as neighbors, to make sure that New Haven is a place where everyone will have the opportunity to thrive.’”