With the end of fiscal year 2016 approaching, Mayor Toni Harp released her proposed budget for the next fiscal year in a City Hall press conference Monday afternoon.
Unlike the first budget of Harp’s administration, the FY17 budget proposes no increase in property tax rates. In fact, residents will see a decrease in taxation levels thanks to a recent state law that caps automobile taxes at $32 per $1,000 of assessed value. With a general fund of $525 million, the $653 million budget represents a 3.4 percent increase in city expenditures from the FY16 budget approved by the Board of Alders last spring. The spending hike will be funded by an increase in state contributions to the city budget, largely through a reform of the Payment in Lieu of Taxes program — which compensates the city for tax-exempt property.
“Four weeks ago, in my State of the City remarks, I said … ‘with a solid financial position, all plans are possible,’” Harp said. “This proposed budget provides a move toward that.”
Harp touted the lack of tax increases in her proposal, noting that the budget increases spending without increasing taxation. In addition to PILOT reform, higher anticipated receipts from building permits will also fund the spending increase, Harp said. She credited Gov. Dannel Malloy and the city’s work delegation to Hartford for ensuring New Haven will continue to receive significant funding from the state.
The bulk of the spending increase Harp has proposed will finance increased payments to the medical benefits account for city employees. Because the city’s medical benefits account is self-insured and thus assumes full financial risk for city employee health plans, Harp said increasing funding to this account is “prudent” and will ensure the city can handle any potential increases in claims.
One budget proposal that may prove controversial is the $10.7 million allocated for a new elementary school named the Strong School at Southern Connecticut State University. After a prolonged battle last spring, the alders rejected a similar Strong School proposal Harp had included in the FY16 budget.
The budget, if passed, would add 27 positions to the city’s payroll, mostly in $48,000-a-year nursing positions at the city’s public schools. The parks department and libraries will each see three new positions under the budget and the City Plan Department will gain two additional staff members.
Harp said the reduction of overtime costs in the police and fire departments played a major role in allowing the city to increase spending without a corresponding tax increase. Whereas fire department overtime cost the city up to $250,000 per week last year, that figure is now down to $28,000 weekly, Harp said. She added that the police department has lowered overtime costs by 50 percent since last year.
“We’re continuing to make efforts in driving down overtime,” City Controller Daryl Jones said at the press conference. “We’re making those strides, and we’re going to continue to make those strides, because it helps the city, it helps residents.”
Anticipated increases in revenues from building permits will account for a large amount of the city’s spending increase. City Budget Director Joe Clerkin said the city has budgeted $10.5 million in permit fees for FY17 but has projected revenues of $15 million from construction at Yale, Yale-New Haven Hospital and “general economic development” in the city throughout the year. Building permits may help ensure the city’s fiscal health; Clerkin noted that higher-than-anticipated revenues from permit fees in FY15 allowed the city to finish that fiscal year in the black.
Now that Harp has made her budget proposal public — a day before the official deadline of March 1 — the proposal will head to the Board of Alders, which will hold a series of committee meetings and deliberations before voting on a final budget in the late spring.
Harp said she is committed to working with the alders throughout the coming months.
“As the process now advances through public hearings and committee deliberation, my administration is available … to work with the Board of Alders to any extent possible,” Harp said. “We will work with all partners for final approval of a responsible budget for the people of New Haven.”
Correction, March 1: A previous version of this story stated that Harp’s previous budgets contained tax increases. In fact, only one of her two previous budgets increased taxes.