New Haven will benefit this year from an increase in property-tax revenue, although the contribution to the budget will be minimal.
New Haven’s grand list of taxable property grew $92 million in value, which will bring in an additional $3.6 million in tax revenue for next year’s budget. The 2.4-percent increase is the largest the city has experienced in a non-revaluation year since 1989.
Rob Smuts ’01, the mayor’s deputy chief of staff, said that although the extra revenue is welcome, balancing next year’s budget will still be a very difficult task. The budget is increasing rapidly because of augmented health benefits and pension costs for city employees.
“It’s a help, but it’s a small help”, he said. “It represents less than 1 percent of the budget. It’s good news because without it — and we’ve had basically flat grand list growth since the ’80s — next year’s budget would be even tougher.”
Alderman Philip Voigt, chair of the Board of Aldermen’s Finance Committee, said that in order to maintain its current amount of spending, New Haven would need to see a $4-million increase in its revenues.
“Our major spending priority is public safety,” he said. “It is hard to see if there is any room to cut spending.”
The city also experienced an increase in tax-exempt property — now valued at $2.9 billion — which may place additional strains on the budget. City Assessor Terence Dinnean said that the level of reimbursement required for these tax-exempt properties will exert even more pressure on the federal and state budgets, and he cited constructions at Yale, Southern Connecticut University and Yale-New Haven Hospital as the main contributors to the increase.
But Michael Morand, Yale’s associate vice president of New Haven and State Affairs, said that it is “factually incorrect” to say that the amount of tax-exempt property has increased due to construction at the University. He said the increase in Yale’s campus footprint over the years has been insignificant, while the University’s payments to the city and the state Payment in Lieu of Taxes program have grown at very high rates.
“Together with our rising property-tax payments, increased voluntary payment and large building-permit fees, this means New Haven’s budget will see $40 million next year because of Yale property, even though the University consumes very few municipal services,” Morand said.
Dinnean attributed a large part of the growth in taxable property to two initiatives undertaken by the assessor’s offices.
The first initiative involved identifying all forms of new construction taking place in the city. Ikea and Pfizer are the two most important new tax contributors, Dinnean said. Other significant new sources of tax revenue include the four-story medical office building on Cedar Street, the Eli luxury apartments at 227 Church St., a new Wal-Mart store and the renovation of a vacant industrial mill in Wooster Square, which was converted into condominiums, Dinnean said.
“A lot of extra revenue came from various renovations which have been going on across the city in the past few years, especially in areas with blighted properties,” Dinnean said.
The second initiative involved requiring businesses to declare their personal property. Dinnean said that 400 businesses that had not previously been in compliance declared their personal property, such as desks, tables, telephones and office equipment. Although Dinnean said it is unlikely that any of these businesses had malicious intents in failing to declare this type of property, their ignorance of statutory regulations stripped New Haven of some much-needed tax revenue.
Another vital factor in raising this years revenue was the 9.4-percent decrease in economic exemption for manufacturers, pharmaceuticals and veterans, Dinnean said. The greatest contributor was Genaissance Pharmaceuticals, who filed for exemption one day late, Dinnean said.
“They had all the information, but there was an oversight,” Dinnean said. “There is a filing date set by the state, and if you miss it, you void your ability to be reimbursed.”