Mayor plans to reduce deficit



New Haven Mayor John DeStefano Jr. recently announced a plan to reduce the city of New Haven’s $9 million budget deficit to $4.2 million by the end of the fiscal year, in part by voluntary contributions from unnamed sources that will possibly include Yale.

The deficit, reported in a routine September budget report, is the result of over-spending and failure to collect the expected funds in taxes and Connecticut state education grants. DeStefano’s solution to the budget gap depends on $2.5 million in voluntary payments.

Although both sides declined to comment on the possibility of Yale coming to the city’s aid, the mayor’s office discussed possible voluntary contributions with the University in September. Both sides said the discussions emerged from an agreement that the city’s fiscal problems were a high priority.

Rob Smuts ’01, DeStefano’s deputy chief of staff, said while city expenditures were over budget, mostly in the area of medical expenses, the city’s revenue figures were the most troubling.

“A couple of months into every budget year, we update our revenue and expenditure projections, in preparation for the mid-year budget correction that we always do,” Smuts said. “When we updated our numbers, we found expenditures are running about $2.5 million higher than in the budget — [But] the revenue side was the big problem.”

According to Smuts, the city is $1.5 million behind in regular tax collections and $2 million behind in delinquent tax collections, with another $3 million of debt resulting from lower than expected education cost-sharing grants from the state of Connecticut.

The current budget also depends on the $7.2 million sale of the Water Pollution Control Authority to a partnership entity later this year. Without it, the city could find itself with a $16.2 million deficit rather than $9 million.

The deficit was mostly the result of faulty assumptions, said Ward 27 Alderman Philip Voigt, chair of the Finance Committee.

“When we’re doing the budget, we make assumptions based on what we think we’re going to get from the state based on the year before, and we make assumptions about revenue based on the year before,” he said. “Some of those assumptions were way off, and that’s where the $4.2 million is coming from — We’re looking forward to seeing the amended budget to see how the city is going to make up for the shortfall.”

Ward 1 Alderman Ben Healey ’04 said these are the most extreme budget deficits he has seen in his experience.

“Those are bad numbers in a mid-year budget report, and we certainly haven’t seen anything like that in my time on the Board of Aldermen,” he said. “We’ll have to be serious about whatever cost-saving measures we implement, and frankly I don’t know what those are going to be.”

Although money is going to be tight this year, Healey said he hopes the city will be able to weather the deficit without either raising taxes or cutting employment.

“We’re not going to raise taxes,” Healey said. “Hopefully we’re going to get through the year without having to cut staff even further. I think that should be a priority as well, because service levels are already down over what they should be — Hopefully we can come together with the administration to produce the new revenues.”

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