As lawmakers in Hartford struggle to create a plan that would reduce $650 million in deficits this year, New Haven is facing the prospect of further cuts in state aid.
After Gov. John Rowland vetoed a General Assembly proposal last Wednesday, state legislators have tried to craft a compromise deficit-reduction bill before Rowland presents his budget for next year on Thursday. Regardless of the plan that passes, New Haven is likely to receive further reductions in state aid beyond those already enacted by the governor.
Mayor John DeStefano Jr. said last week that he expected the state’s plan to include “draconian cuts” in state aid to cities and towns.
“We have already had two reductions in state aid in terms of absolute dollars we collect,” DeStefano said. “What they are doing is pushing the city towards deficits and towards service reductions.”
In DeStefano’s State of the City address Feb. 3, the mayor forecasted a property tax increase and layoffs that would likely include police officers, firefighters and teachers. The Connecticut Conference of Municipalities estimated that the Democratic proposal the governor vetoed last week would have resulted in over $2.5 million in reduced state aid for New Haven.
Yet even as DeStefano prepares to release his proposed budget for next year on March 3, the city still does not know how much state aid will be reduced for the current fiscal year. New Haven receives over half its operating budget from the state.
State Rep. Patricia Dillon, who serves on the General Assembly’s Appropriations Committee, said the deficit negotiations have been difficult because legislators have had to adapt to an economic downturn that has significantly changed the state’s fiscal situation.
“With the exception of just a handful of us, most of the legislators up there have never been there in bad times. The question is whether they have the experience to deal with times on this,” Dillon said.
According to the National Conference of State Legislatures, at least 36 states are suffering from budget deficits. But Connecticut’s efforts to address deficits have been particularly acrimonious due to a dispute between Rowland and state employees’ unions who have demanded that state rehire 2,800 laid-off workers.
State Sen. Toni Harp, chair of the Appropriations Committee, said the ongoing negotiations largely concern the size and nature of tax increases that the state might include in a deficit-reduction plan.
“There’s a real disagreement about taxes,” Harp said. “For many people in the legislature, this will be the first time in their history that they’ve had to pass a significant tax increase.”
Harp also said expectations of reduced federal aid — and lower federal taxes — have reduced the ability of states facing large deficits to rely on the federal government for help. She said reductions in state services will affect New Haven residents more adversely than cuts at the local level.
But Julio Gonzalez ’99, the mayor’s executive assistant, said the current deficit-cutting proposals in Hartford would have a “catastrophic” effect on local municipalities. He said state aid reductions would damage New Haven’s ability to attract businesses and residents.
“The budget that we want to put out is a blueprint for how we generate growth so we don’t have to perpetually tax or borrow our way out of deficits,” Gonzalez said. “If we’re raising property taxes, cutting back on cops, and sending fewer kids to college, we’re not going to be an attractive place for investment.”
State Senate Majority Leader Martin Looney, a New Haven Democrat, said some cuts for the Elm City were inevitable given drastic reductions in revenues at the state level.
“The fact is that the state of Connecticut has been extraordinarily supportive of the city of New Haven,” Looney said. “Anyone who is reasonable would recognize that this is a reality that everybody will have to deal with given cuts throughout the state.”