Budget deficit faces New Haven

New Haven Mayor John DeStefano Jr. began official discussions of the 2011-’12 city budget last Tuesday.

The mayor predicted the budget shortfall next year would be $57 million, with the deficit expected to skyrocket to $309 million by 2014. DeStefano addressed the Board of Aldermen’s Finance Committee at City Hall Tuesday to present New Haven’s four-year budget outlook, calling for concessions from unions on employment costs to combat the ballooning cost of health care and cuts in state aid, the city’s biggest source of revenue. While a spokesman for local unions 3144, 884, 3429, 1303 and 287 expressed disagreement with DeStefano’s views, local aldermen emphasized the need to cooperate.

The predicted budget shortfall comes on the heels of the $8 million gap in this year’s budget the city needs to close by July, DeStefano said, adding that he does not anticipate it will be filled before next year.

While the mayor pointed to Connecticut’s expected $3.7 billion deficit and a $20 million cut to Education Cost Sharing grant funds as a major factor in the city’s impending budget crisis, he cast the situation as an opportunity to identify and refocus budgetary priorities, which include education and reinvigorating local neighborhoods.

To achieve that aim, he pressed unions to accept cuts to employment benefits, such as health care and pensions, and called for a 5 percent budget reduction in city departments, which he said would amount to $77 million in potential savings.

“There are people living here who can’t afford a tax increase,” DeStefano said in a confrontation Oct. 5 when union workers stormed City Hall in protest of the proposed budget.

“This is not a choice between unions and the rest of us,” he said. “Everyone has the same interest: a budget that serves the fundamental needs of the public and one in which employees are treated both fairly and consistent with the city’s ability to pay.”

Yusuf Shah, chair of the Board of Aldermen’s Finance Committee, said he thought DeStefano’s suggestions were appropriate given the city’s financial situation.

“When times are good, we do not ask for these really tough concessions,” Shah said. He added that the alternative would be a reduction of city services and a rate hike for such services or an increase in taxes. “And we don’t want that.”

Local unions were predictably unimpressed by DeStefano’s suggestion.

Larry Dorman, spokesman for the American Federation of State, County and Municipal Employees Council 4, which represents 1,400 city and Board of Education workers, said that while unions had been working cooperatively with the mayor’s office, DeStefano was trying to make them scapegoats for the city’s budget problems.

“I think the mayor has put out a gloom-and-doom budget that cynically pits city employees against taxpayers, creating a fictitious struggle for the survival of New Haven,” Dorman told the New Haven Independent Nov. 23.

He said the mayor’s office had rejected union concessions in the past, pointing to a Local 3144 proposal to avoid layoffs, which was expected to save $600,000, that had been turned down by the mayor in 2009.

Still, aldermen said the solution would be found in compromise.

President of the Board of Aldermen Carl Goldfield characterized the city’s relationship with unions as a “classic situation of swimming together or sinking together.”

“Taxpayers are pretty much tapped out,” he said. “If we don’t make such changes we can’t keep doing what we are doing, [such as] essential city functions.”

Ward 1 Alderman Michael Jones ’11 said the city should be careful not to balance its budget solely on the backs of city employees, insisting “there is fat to trim from a number of places.”

“Until we get a better sense of what the state plans to do in balancing its budget, especially with things like Educational Cost Sharing and town aid, it will be difficult to forecast the deficit,” Jones said.

The Board of Aldermen approved the New Haven budget for fiscal year 2010-’11 May 27, and DeStefano will present next year’s budget to the board early next year.

Alon Harish contributed reporting.

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