City ready for cuts in state aid

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In what has become a familiar situation for the Elm City, New Haven officials face the prospect of receiving about $1.2 million less in state aid than the city had anticipated.

With the Connecticut General Assembly still considering the state’s budget for the coming year, a proposal currently under discussion may force New Haven to cut services in order to reach a balanced budget. Mayor John DeStefano Jr. has already proposed a 3.7 percent property tax increase for next year, leaving many local officials wondering how the city will address the shortfall.

Although the budget-making process is far from complete in Hartford, DeStefano said he did not expect a “good budget year” for New Haven. With several members of the Board of Aldermen already concerned about the likely tax increase, DeStefano said the city may need to reconsider its budgetary priorities.

“The issue is whether anyone’s willing to trade off the number of cops or firemen or aides in kindergartens,” DeStefano said. ‘That’s the choice here, and how it all sorts out is what the process is going to be all about.”

City officials said they worried that proposed allocations for the state’s Education Cost Sharing program — approved by the General Assembly’s Appropriations Committee last month — will leave the city in difficult fiscal straits despite increased funding to compensate New Haven for certain tax-exempt properties. The projected cut adds up to less than one percent of the city’s total aid from the state, but with the city’s recent fiscal troubles, even a slight decrease in revenues requires tax increases or cuts in city services.

New Haven, which has faced similar predicaments in the past, has often found itself in this situation because of the calendar that governs city and state governments in Connecticut. Although the governor introduces his proposed state budget at the beginning of the year, it often takes several months for the state to determine its spending for the coming year. As a result, cities like New Haven — which relies on the state for just over half its revenues — must write their own budgets without knowing how much money they will have at their disposal.

State Sen. Toni Harp, a co-chair of the Appropriations Committee, said New Haven can find itself in a particularly challenging situation when it assumes that the city will receive more aid than Gov. John G. Rowland proposes in his annual budget.

“Most mayors use a very conservative figure — the governor’s proposal — because to do otherwise is very risky,” said Harp, a Democrat from New Haven. “It’s one of those things that makes municipal budget setting an art, and not a science.”

Ward 1 Alderman Ben Healey, who serves on the Board of Alderman’s Finance Committee, said he did not expect the city to raise taxes beyond the mayor’s proposed increase. Instead, New Haven Superintendent of Schools Reginald Mayo may have to cut the city’s education budget, Healey said.

“If the state budget goes through, Dr. Mayo is going to have to make some choices over at the Board of Education,” said Healey, a Democrat who represents much of the Yale campus. “I think the impact will come, unfortunately, in the school system.”

Harp and her fellow co-chair on the Appropriations Committee, State Rep. William Dyson of New Haven, both said this month that the level of state aid New Haven will receive will likely depend on how much the state receives in taxes this month.