The question will allow New Haven residents a chance to either reauthorize or reject the City and Town Development Act, which enables the Board of Aldermen to provide state bonds and tax breaks to businesses and developers. The legislation must be approved by Connecticut municipalities every five years to remain in effect because of a sunset clause in the original 1975 legislation. New Haven residents have approved the act every time the question has gone to referendum since the 1970s.
The act itself was reapproved by the Board of Aldermen in August. City officials cannot publicly campaign on behalf of the act, but can only describe to voters exactly what it does, Deputy Economic Development Administration Christine Bonanno ’01 said. Despite this, she and Tony Bialecki, New Haven’s deputy director of economic development, both expressed confidence that voters will choose to reauthorize.
The purpose of the act is to give governments of municipalities more control — and responsibility — over what kinds of development projects they can approve.
“[The act is] generally used when developers or businesses — especially industrial businesses — have trouble getting financing for their projects,” Bialecki said.
The act allows cities to be an intermediary to issue state bonds, Bialecki said. Banks and investment groups favor these bonds, and developers or businesses that benefit from the bonding pays back the bonds, Bialecki added. Furthermore, he said that should a business fail, the city would not be liable for repayment of the bonds, nor would the city’s credit rating hurt, because the money comes from the state.
Although the act allows for tax breaks for developers, Bialecki said tax breaks have, as a general rule, not been approved since 1994.
Michelle Whelley, CEO of the New Haven Economic Development Corporation, added that similar programs exist in other states and usually pass at the city level.
“It’s hardly a controversial matter,” she said. “It’s important that people vote in favor of it, and I expect it to be passed.”
Indeed, the exact same measure passed by a large margin — about 22,000 votes to 12,000 — in Hamden in November 2008, Kroop said.