Mayor Toni Harp pitched a $510.8 million budget on Friday — asking taxpayers to chip in an additional 3.8 percent for a spending plan she said will stabilize the city’s finances while protecting core services.
Harp’s proposal calls for a 2.7 percent increase in spending over last year’s $497-million budget. Much of the increase stems from rising fixed costs, Harp said: debt service, pension liabilities, medical benefits and contractual salary increases. The budget also sets aside an additional $1.5 million for the Board of Education and $2 million for a five-year financial plan, which would also begin replenishing the city’s depleted rainy day fund.
To cover costs, Harp proposed a mill rate increase of 1.56 for the fiscal year beginning July 1. That would hike up the amount homeowners pay per $1,000 of assessed property value from $40.80 to $42.36. Harp estimated that someone with a home valued at $150,000 would pay an additional $170 per year.
Asked how she would defend the increase to a disgruntled resident, Harp said taxes are the cost of expecting 21st-century city services.
“We’ve got to be realistic about what it is we want in terms of services from the city and realistic about how much they cost,” Harp said.
Staff cuts and dwindling resources over the past 20 years have left the city ill-equipped to meet its current needs, said Harp, who took office Jan. 1. She said New Haven’s mill rate is “much lower” than the rates maintained by cities of comparable size, including Hartford and Bridgeport.
Harp said she gets complaints “every day” about inadequate services, including snow removal in the wake of the recent spate of snowstorms. The city’s financial straits go deeper than aging snow plows, though. A series of short-term solutions designed to mask longer-term difficulties have “left the city in a hole,” Harp said.
She said her budget is meant to “hold the line” in the face of a $600,000 general fund deficit, a drained rainy day fund and multiple credit rating downgrades. Harp said she was “surprised” to learn just how shaky the city’s fiscal footing was when she assumed office just under two months ago.
Citing a direct contrast with past strategies, Budget Director Joe Clerkin said the most notable aspect of the proposed budget is its structural soundness. The city will no longer depend on short-term revenue boosts or one-time cuts, he said.
“There are no gimmicks in this budget,” said City Controller Daryl Jones.
Jones said the budget proposal attempts to move away from a “crisis management” mode and begin a process of strategic planning. The portion of the 2.7 spending increase that does not go to fixed costs or education represents the first installment of a five-year financial plan designed to cover long-term obligations. Half of the $2 million goes toward restoring the general fund balance. Of the remaining sum, $500,000 is set aside for post-employment benefits, and the final $500,000 goes to a “pay as you go” fund for future capital projects. That way, the city will be able to pay for needed infrastructure upgrades with cash on hand, and not through bonding, which multiplies debt.
Though the details of the financial plan are preliminary, Clerkin and Jones said, the strategy itself marks a significant change in New Haven’s financial scheme.
“It’s very important to set those parameters because now the rating agencies are saying, ‘Oh wow, you guys are starting to handle your business,’” Jones said. “It’s a way to guide and establish a vision.”
Harp said she had recommended numerous spending cuts, which staved off a more sizable tax increase.
All city department heads were asked to trim two percent from their budgets. Whether they succeeded or not, Harp said, small cuts were made across the board. The proposal also trims $1.8 million — roughly 25 percent — from spending on police and fire overtime.
Harp said the budget demonstrates strong commitment to youth services and education. She was able to give $1.5 million more to the Board of Education, although they requested $5.3 million. She increased spending by 40 percent for the Youth Services Department and by 55 percent for the Commission on Equal Opportunities, the city’s civil rights agency.
Under the proposal, the mayor’s office would see its funding increase by nearly 50 percent, from $900,000 to $1.3 million. The increase owes largely to the addition of six positions, including employees in a new grants-writing office and a bilingual receptionist.
Altogether, the proposal calls for the creation of more than a dozen new City Hall positions and the elimination of six current ones, all of which are currently vacant. An assistant city clerk and a food system policy director are among the requested additions; a tree trimmer and a public works project manager are among the jobs Harp wants to ax.
Harp set her capital budget — money for large development projects separate from the $510,795,912 general fund budget — at roughly $44.4 million. It includes funds for the redevelopment of the Coliseum site, new public works vehicles and upgrades to Tweed Airport.
The proposal now goes to the Board of Alders’ finance committee, which will debate and revise the budget before it passes along a final recommendation to the full body for a vote.
ALDERS WEIGH IN
Ward 19 Alder Mike Stratton lit into Harp’s proposed budget on Saturday, calling it “irresponsible” and in defiance of “basic economics.” He pledged to vote against any budget that includes a tax hike.
“My view is that the worst thing we can do for job growth in the city is to raise taxes,” Stratton said. “The cost of raising taxes even a dime is enormous — a simple economics course shows you that you devalue the homes, drive away businesses and devastate the grand list.”
Comparing New Haven’s mill rate to the rate in Hartford and Bridgeport is to suggest the city should measure itself against places that, financially, resemble “devastated third-world countries,” he said.
Stratton, who represents Prospect Hill and Newhallville, said the roughly $10-million rise in fixed costs could be absorbed through more strategic downsizing.
Stratton decried cuts to police overtime and the number of city tree trimmers, saying Harp is sacrificing necessary spending for the sake of “patronage” jobs and duplicative city departments. He called for the combination or elimination of departments including community services, health, youth, disability and elderly — arguing that the services they perform could be executed by other levels of government or via grants to the school district, to police or to nonprofits.
He further suggested privatizing the city’s information technology services and hiring an outside company to handle payroll and workers’ compensation currently administered by the finance department.
Most troubling of all, Stratton said, is Harp’s proposed expansion of her own office.
“She has refused to make any hard choices while raising her own budget by 49 percent,” Stratton said. “It’s completely selfish. It’s nauseating.”
Ward 22 Alder Jeanette Morrison struck a more conciliatory note, emphasizing that the mayor’s budget is merely a proposal. She said the finance committee has the power to make significant changes based on public testimony.
Morrison, who represents Dixwell and four Yale residential colleges, shared Stratton’s concern about the tax burden but said Harp is in a tough spot.
“She has a responsibility to propose certain things to keep services in place,” Morrison said. “No one likes paying more money. I don’t want to pay more money. But we want services.”
Ward 10 Alder Anna Festa said she is already receiving anxious phone calls and emails from constituents in East Rock who are “tired of getting slammed every year.” If taxes get too high, Festa said, people will leave the city. She said the solution is simple, even if it is not pleasant: “curb our spending.”
Ward 9 Alder Jessica Holmes said she needs to understand Harp’s rationale before passing judgment.