State budget spells trouble for city

Governor M. Jodi Rell’s proposals to amend the state’s budget could make life harder for city officials to balance their budgets, city officials said Wednesday.

Facing an approximately $500 million budget deficit for fiscal year 2010, Rell laid out her plans for the state’s finances during her State of the State address Wednesday, announcing that she will not raise taxes. In her proposed changes to the budget, Rell said she will reduce government spending by $28.6 million. With the proposed budget, state funding to New Haven would drop by about $3.6 million to about $197 million, Rell’s spokesman Adam Liegeot ’94 said. Mayor John DeStefano Jr. said in a statement Wednesday that he will take “the steps needed” to protect the city’s primary goals, such as implementing school reform, ensuring public safety and creating jobs, though City Hall spokeswoman Jessica Mayorga did not specify what those steps were.

“We all understand the need to sacrifice and tighten our belts in this difficult economy,” DeStefano said in the statement.

New Haven currently faces a budget deficit between $7 and 10 million, Ward 23 Alderman and finance committee chair Yusuf Shah said, adding that Rell’s budget proposals are “too little, too late” to help New Haven. He said the finance committee is scheduled to meet next Wednesday and will discuss the city’s budget at the meeting.

Shah said economic development initiatives DeStefano hopes to implement will bring more jobs to the city and help the economy to flourish. In his State of the City address Monday, DeStefano said these development projects include the closing of a section of the Route 34 connector to make room for mixed-use developments such as 100 College St. He said the project will allow for around 900 permanent jobs and 1,200 construction jobs and will unite the downtown, including Yale’s central campus, and Yale-New Haven Hospital, the School of Medicine and Union Station.

Liegeot said Rell has decided not to cut the Education Cost Sharing grant, which subsidizes the costs of municipal public schools and is one of the major state grants the city receives. Rell is also proposing for the 2010-’11 fiscal year $5 million more in funding for charter schools across the state and will create a Keno lottery program, which she expects to generate $20 million.

In her speech, Rell decried the state’s lack of credit and explained a project called the Connecticut Credit Consortium, which would be funded by the state government and local banks and would provide loans to local businesses to create jobs. She added that the consortium will have access to $500 million, of which $25 million will be given as small or micro-loans to small businesses.

The state’s budget has plagued Rell since September, when she refused to sign off on an earlier version, saying she wanted to cut spending further. The state was facing an approximately $8 billion deficit at the time. Nonetheless, the state legislature passed the budget without her signature. When Rell announced in November that she would not seek re-election, she said she wanted to focus on managing the state’s budget for the rest of her term. In addition to laying out her budget plan, Rell announced Tuesday that she is establishing a special commission, which will include state officials and independent financial experts, to help to solve the state’s debt problem.

State Senate Majority Leader Martin Looney (D-New Haven) said that while Rell addressed the budget for the fiscal year 2011, she offered no plan to solve this fiscal year’s deficit. Even so, Looney and potential Democratic gubernatorial candidate Dan Malloy said they were pleased to see that Rell proposed providing loans to small businesses, something Looney said she and the Democrats have in common.

Ned Lamont SOM ’80, a potential Democratic candidate for Rell’s seat, said Rell’s proposal to start the special commission puts the burden of the state’s financial troubles on the next governor, adding that he sympathizes with DeStefano and the challenges he will face balancing his city’s budget.

“It’s a moving target,” Lamont said. “Just when you think you plan for a budget … A few months later, you realize it was out of whack.”

Mayorga announced Wednesday that the city received “A-” grades from three major bond-rating agencies.

Comments

  • The Count

    And how much more can they bleed Tweed-New Haven Airport’s budget so they can build the rail line to Bradley? I guess I’m the only one who sees this.