As the federal government moves to do whatever it can to bail out Wall Street (ah, to be a CEO), cities nationwide are left to fend for themselves and their financial future. New Haven is no exception.
On Sept. 19, Mayor John DeStefano Jr. announced the city would lay off 34 workers, a move intended to close the remaining $4 million deficit by at least $900,000. Those knocked out included six Board of Education employees, eight Public Works employees, and six people from the Parks Department, and, as of last week, the mayor indicated that more might be joining their ranks.
Of course, this is hardly uncharted territory for the Elm City and its leader. Ever since layoffs became a natural financial exercise in the mid-1980s, nearly all American cities have been quick to the trigger, and in some cases rightly so. The cities protect their pocketbooks.
But is New Haven missing something?
To the mayor’s credit, he was able to cut down what was initially a $13 million hole by smartly selling some of the city’s property for development and by renegotiating important health-care and energy contracts. And before he dealt the pink slips, he did offer incentives for voluntary resignation, including early retirement packages.
“All layoffs were made judiciously,” DeStefano said last Wednesday, “targeting jobs that are not indispensable to the functioning of the government.”
But some of his other cost-cutting proposals, while in good spirit, just do not seem feasible. Raising the property tax, even with effective collection, may hurt the city more than help it. Raising the sales tax, as DeStefano tried to do last year and said he is willing to try again, would dry up business.
Is there an easy answer? Probably not, but there are some policies that the city should consider — if not now, then soon.
One answer lies in letting the workers “move around” more in the bureaucracy. It is a matter of equilibrium — allowing the workers to go where they are most needed — and it has a backer in Douglas Rae.
“More mobility is desirable,” the former New Haven Chief Administrative Officer and current political science professor said. “If it’s possible.”
That kind of policy would require the unions that represent the vast majority of New Haven’s public workers to compromise what Rae called their “rigid contracts” with the city. In the long run, that would mean getting the workers’ approval of such flexibility in the labor they provide. This could cut in on specialization, though looking at the list of workers laid off, specialization did not seem to be an issue in the first place.
A second answer comes in attacking the problem at its source. One of the major reasons the budget had such a large hole in the first place was the state government’s failure to fund fully its Payment In Lieu of Taxes (PILOT) program. PILOT funding is given to a city to make up for money lost on untaxable real estate, which in New Haven includes all of the land owned by its largest employer — Yale.
By statute, the PILOT program is supposed to provide any municipality with revenue amounting to 77 percent of what the untaxable land would have yielded. The last time this happened was 10 years ago. Gov. Rell and the state Appropriations Committee have fallen short routinely in recent years, even as the amount of tax-free land in New Haven has shot up. This year, the city was only refunded at 58 percent, well short of the mayor’s 73 percent goal. The difference is over $10 million in the city budget.
The Board of Aldermen met with members of the state assembly last year to come up with a solution, and the state Finance, Revenue and Bonding Committee developed a tax plan that would bulk up the reserves in the PILOT program. But that plan never passed, and the city had no further recourse. As the mayor starts to look into his budget for the upcoming fiscal year, it is important that he move to get Rell to follow through on the promises of the PILOT program, and he should ask the unions for help.
As always, though especially now, municipalities like New Haven need the flexibility that Rae’s idea of bureaucratic mobility or PILOT provide. And for Connecticut to stay healthy through what may be a tough couple of years, it needs its cities to be sustainable. They cannot be put in a position where layoffs are anything other than a last resort.
Samuel Breidbart is a sophomore in Branford College.