Nat Kerman
After months of negotiations, New Haven has a budget: the Board of Alders last Tuesday approved a budget that cuts the property tax hike from an original 3.56 percent to 2.06, commits City Hall to over $2 million in additional cuts wherever possible and includes a $2.5 million increase in Yale’s voluntary payment to which the University has not agreed.
The revised budget, which Elicker intends to sign, is $1.13 million smaller than the mayor’s March proposal. It represents a middle ground between the original version and the one released by the Board of Alders finance committee two weeks ago. That proposal cut the mayor’s tax hike in half, featured $7 million in cuts and counted on a non-binding demand that Yale increase its voluntary payment. The final version put the tax hike between the two earlier proposals and reduced the number of cuts while maintaining the Yale revenue initiative. In a statement, Yale said that its current payment was the highest from a university to its hometown and did not indicate that this payment will increase.
During finance committee debates and last Tuesday’s full board meeting, several alders expressed concerns about the city’s ability to implement additional cuts or move the needle on Yale’s contribution. Still, the budget passed overwhelmingly last Tuesday, with Ward 7 Alder Abigail Roth ’90 LAW ’94 casting the sole dissenting vote.
“The City faced significant financial challenges when our team introduced the budget to the Board of Alders on March 1st,” Elicker said in a statement. ”Now that we confront COVID-19, those challenges have been exacerbated. The Board of Alders and I very much want to maintain service levels and keep taxes to a minimum. I believe the budget our team presented to the Board struck the right balance.”
Still, the mayor noted that the alders’ changes — most notably, a $1 million Board of Education increase instead of Elicker’s proposed $3.5 million, and the requirement to reduce non-BOE expenditures by another $2 million — will be difficult to implement. The final departmental cuts are a step down from the finance committee’s May 14 version of the budget, which required departments to cut spending by $3.8 million.
As it does every year, Yale featured prominently in budget conversations, both among elected officials and the community at large. At each of the Board of Alders’ public meetings, New Haven residents flooded the virtual mic to call on Yale to increase its voluntary contribution to the city. The COVID-19 pandemic has only added urgency to long standing community demands, many residents have said.
The alders indicated their position in that debate by including a non-binding $2.5 million increase in Yale’s contribution in the final budget.
Yale’s has gradually increased its payment in recent years. In FY 2017-18, Yale made a $7.5 million voluntary contribution to the Elm City. That number rose to $9 million in FY 2018-19 and $11.5 million in FY 2019-20. Each of those years, the alder-approved budget roughly aligned with the University’s contribution.
This year, Yale’s voluntary contribution exceeded $12 million. The mayor denounced that number as negligibly small in light of the University’s $30.3 billion endowment. Still, his March proposal — which featured a $13 million expected payment — did not anticipate a significant increase.
In response to similar criticisms in the past, Yale has noted both the size and growth of its voluntary payment: This year’s $12 million contribution represented a 44 percent increase from its counterpart three years earlier. The University also highlighted non-financial contributions, COVID-19 relief efforts and its $5 million annual property tax payment on non-academic buildings, which makes Yale the third-largest taxpayer in the Elm City.
Ward 10 Alder Anna Festa warned against non-binding increases in the finance committee’s mid-May deliberations. She voted against that amended proposal on the grounds that the departmental cuts were unspecified and that the Board of Alders has no power to require Yale to increase its payment.
Festa maintained those worries on May 26, calling the board’s reliance on increased Yale funds irresponsible. Ward 1 Alder Eli Sabin ’22 likewise questioned the prudence of such an assumption.
But when it came time to vote, both alders sidelined these concerns and approved the proposal.
So did all of their colleagues, spare Roth. She agreed that Yale needs to contribute more to New Haven but noted the difference between a hope and a guarantee.
The 2020-2021 budget is not the first Elm City fund to feature ambiguities. This year’s budget has a $4.9 million revenue initiative line item, Roth noted last Tuesday. The city has received $0 of that money as of its most recent budget report, which reflects expenditures through March 31.
While the final budget looks markedly different from Elicker’s March version, the two share several significant changes. As did the mayor’s original proposal, last Tuesday’s budget slashes 80 vacant positions and restructures several city departments.