Malloy reduces city deficit

In a Wednesday afternoon meeting with the mayors of the state’s three largest cities, Gov. Dannel Malloy promised Mayor John DeStefano Jr. that he had found sufficient funds in the state’s ailing budget to continue providing education funding thought to be at risk due to lost federal stimulus dollars.

Malloy’s announcement means the cities will not have to find a way to replace the Education Cost Sharing funds that were slated for a reduction.

The announcement comes as welcome news for city officials struggling to close a multi-million dollar budget gap — current estimates indicate that Malloy’s announcement will slice around $11 million off the deficit, cutting it from around $42 million to $31 million, said City Hall spokesman Adam Joseph.

“It’s a good thing for the city and for the direction the city is going,” Joseph said.

He added that while he can estimate the newfound funds will decrease the deficit by around $11 million, the city will not have a full understanding of the budget issues it faces until the governor releases his budget on Feb. 16 because the Education funding “is not the only variable in our deficit calculation.”

The governor’s budget will attempt to close a $3.67 billion statewide deficit, but the Wednesday announcement means Malloy, a Democrat, has set aside $540 million in Education funding; a spokeswoman for Malloy declined to comment on where this money will be coming from. The governor’s pledge includes filling in a $270 million hole in federal stimulus money for education, the spokeswoman said.

Malloy’s announcement comes less than a week after the city’s certified grand list, a listing of all taxable property in the city, showed New Haven’s growth as tops in the state. The growth in taxable property trimmed the budget deficit $6.3 million. The bulk of this growth came from real estate developers like Winstanley Enterprises, the company behind biotech labs and office space at 300 George Street.

City officials have been exploring options to narrow the budget gap. Last month, DeStefano said he would push state legislators to allow him to require all city employees to live within New Haven city limits. Currently, roughly 63 percent of city employees live outside New Haven’s borders — DeStefano said he thinks bringing them into the city would build the tax base and improve public services.

The mayor has also announced plans to alter city employees’ pensions; in his state of the city address earlier this week, he said he wants to limit eligibility for early retirement, rework the formula the city uses to calculate pensions, and boost individual contribution requirements for the plans.

Malloy will give a speech to address the state budget on Feb. 16.

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