2 Visions Pitched For Getting More $ From Yale

Should city leaders argue for greater financial contributions from Yale University and Yale New Haven Hospital by focusing on those institutions’ sheer wealth and the relative poverty of the city they reside in?

Or should they promote the many services that the city already provides — from fire suppression to street lights to 9 – 1‑1 emergency support — that those growing institutions inevitably benefit from?

Two city residents pushed those different rhetorical tacks during the aldermanic Finance Committee’s first hearing of the budget season.

Those pitches were made Wednesday night during the committee’s first public hearing since Mayor Justin Elicker proposed a $569.1 million general fund budget for Fiscal Year 2020 – 2021 (FY21) earlier this month.

The meeting took place not in the committee’s usual gathering space on the second floor of City Hall, but instead in the Hillhouse High School auditorium on Sherman Parkway.

While roughly 50 people, including many city staff, turned out for the hour-and-a-half meeting, only three members of the public testified during the public hearing section.

None of those three focused their comments on the mayor’s proposed 3.56 percent tax increase, the proposed elimination or defunding of roughly 80 currently vacant city positions, or the proposed restructuring of the current Youth Services, Parks, and Public Works departments into two consolidated new departments. (Click here to read the full proposed budget.)

Instead, two of those commenters, former East Rock Alder, former city economic development staffer, and current Westville resident Matt Smith and UNITE HERE Local 34 union researcher and West River resident Julia Salseda, testified almost exclusively about an issue that Elicker has sought to foreground in his own public presentations about the budget: How to get the city’s two anchor institutions, Yale and YNHH, to up their current voluntary financial contributions to the city in light of their largely tax-exempt status as nonprofits and the city’s financial troubles. (The third member of the public to testify Wednesday was Fair Havener and public library board member Lee Cruz, who urged the alders not to follow through on the mayor’s proposed $183,500 cut to the city library’s budget.)

According to Elicker’s proposed budget, Yale is slated to contribute $13 million and YNHH is slated to contribute $2.8 million to the city next fiscal year in voluntary payments.

That does not include the roughly $5 million in property taxes on non-academic properties that the university pays into the city’s tax coffers.

“I do not believe that New Haven’s books should be balanced largely by Yale University writing dramatically bigger checks,” Salovey wrote in a statement issued at the time of Elicker’s first budget press conference on March 1.“I do not believe that New Haven’s current financial problems are the result of a lack of generosity from Yale. We will continue to increase our voluntary payment over time, but not at the rate the mayor has suggested.”

“While imposing additional voluntary payments is not the answer,” YNHH Senior Vice President Vin Petrini wrote in a statement also issued on March 1, ​“we remain open to working on creative approaches with the city.”

Click here and scroll down in this articleto read Salovey’s and Petrini’s statements in full about why they believe their respective institutions’ should not have to up their voluntary financial contributions to the city. Click here here to read a subsequent rebuttal to Salovey’s op-ed made by two Yale undergraduates.

Smith: Renegotiate Yale’s Fire Payments

During his testimony Tuesday night before the alders, Smith argued for a pragmatic approach that focuses on tangible services that the city provides that Yale and YNHH staff and students benefit from simply by being in New Haven. 

He noted that Yale University already contributes some money to defray part of the costs of one such service: fire suppression and emergency response by the New Haven Fire Department.

That financial agreement dates back to 1990, when the city and the university agreed to a memorandum of understanding that provides that Yale will make an annual voluntary contribution to cover city fire serves provided to university owned tax-exempt properties.

That payment is equal to 5.68 percent of the city’s general operating budget allocation for the fire department.

“That number was agreed upon because that was the amount of the budget gap for 1990,” Smith said. ​“It ties that voluntary payment not to the growth of the university, but to how big or how small our fire department is.

“Since 1990, Yale’s footprint has increased immensely, thereby increasing the risk at which we will have to send our fire department for any particular incident. That increased risk is not in any way reflected in that agreement.”

He added that when that agreement was first struck, the 9 – 1‑1 services for the fire department fell within that department’s budget. Since then, those services have been combined with that of the police, meaning that the city has lost out on potential 9 – 1‑1-related revenue that the university could be paying.

This type of financial arrangement should not stop just with fire services, Smith continued. ​“The city provides other services to the university that enables it to carry out its mission.”

If there’s a snow storm, the city plows the streets. If people walk, they use city streetlights. If people use the city parks, they benefit from city parks maintenance work.

“I think that if we can engage Yale in a way where that they feel that they’re getting something for their money, a service that the city provides in good faith, we can increase that voluntary payment. But I think in any negotiation, it needs to be indexed that reflects the growth of the university, so that it’s not stagnant.

“Remember, Yale is a 300-year-old institution. It is here for the long game.”

Smith also said that the hospital should be included in such renegotiated service agreements.

“We need to be smarter about how we engage Yale in our local economy.”

Salseda: ​“An Annual Tax Break Of $146M”

In her pitch to the aldermanic committee, Salseda took a rhetorical tack that the Yale clerical and technical workers union she works for has been promoting since late last year: that Yale should increase its voluntary contributions to the city because it would have to pay upwards of $146 million more in local taxes if it weren’t for its tax-exempt nonprofit status.

“The value of this tax-exempt land has quickly grown and the reimbursements that New Haven receives for the revenue lost through these two tax exemptions has simply not kept pace,” she said. ​“We are now in a situation where a city with significant challenges is being asked to give one of the wealthiest universities and one of the most prestigious hospitals in the world an annual tax break of $146 million.”

In response to union leaders making similar argument during this year’s annual Martin Luther King, Jr. Day service at Varick Memorial AME Zion Church, Yale spokesperson Karen Peart wrote that ​“Yale is a strong supporter of and contributor to New Haven. The university’s annual voluntary payment to New Haven is over $12 million. No other city receives a larger voluntary payment from a single institution. The university also pays over $5 million in annual property taxes on its non-academic properties and as a result is one of the top four real estate taxpayers in New Haven.” Click here and scroll to the bottom of the article for Peart’s full response.

“New Haven is in crisis,” Salseda said Wednesday night. She said that in low-income neighborhoods, 34 percent of residents pay half of their income in housing and 44 percent of children experience poverty. She pointed out that the city school system wrestled with a roughly $30 million deficit last several years ago, and that city property owners have borne the brunt of several recent tax increases.

“Given the extraordinary wealth of Yale University and Yale New Haven Hospital, their current refusal to do more for New Haven is puzzling.”

The university has an endowment of over $30 billion, she said. That’s more than 65 times larger than the endowment of the University of Connecticut.

“This revenue would be transformative for New Haven,” she said about Yale increasing its voluntary payments to match what it saves in tax exemptions. ​“Instead of being forced to make agonizing choices, our city could be working together to ensure that every resident has access to well-funded schools, affordable housing, job training, safe neighborhoods, and more.”