While Yale engages in talks with the city of New Haven over increasing its voluntary payments to local government, city officials are exploring the possibility of negotiating similar contributions from other nonprofits.
As the city’s largest employer and private property owner, Yale has been the focus of the city’s effort to seek voluntary payments from tax-exempt institutions in response to recent budgetary woes. But New Haven Mayor John DeStefano Jr. has said the ongoing talks with Yale — which remain at an early stage — represent only part of the dialogue between the city and its growing nonprofit community.
Although DeStefano declined to discuss which other New Haven institutions might be involved in discussions concerning voluntary payments, the list would likely include other large nonprofits, including Albertus Magnus College, Hopkins School, and the city’s two hospitals, Yale-New Haven and St. Raphael’s.
“I think there would be organizations beyond Yale, and I would leave it at that,” DeStefano said. “I think each institution has its own peculiar set of concerns that we are going to have to listen to.”
The University has said it is willing to consider making additional financial contributions to City Hall, although both city and Yale officials said they have not met in recent days to discuss the issue. No timetable has been set for an agreement, and neither side said a specific framework for any new payments has been determined.
But while the University has made payments for fire services since 1990, no other nonprofit makes a major voluntary contribution to city government, DeStefano adviser Rob Smuts ’01 said.
Under state law, nonprofits in Connecticut — including schools, churches and hospitals — are exempt from paying local property taxes, which make up nearly half of New Haven’s budget. Although the state reimburses cities for about two-thirds of the lost revenues, DeStefano has argued that Connecticut’s tax system is a major cause of the city’s recent fiscal troubles, which have led to three consecutive tax increases.
Bill Brucker, a spokesman for the Hospital of St. Raphael, said hospital officials had briefly discussed the idea of voluntary contributions with the city at a very preliminary stage.
“We have been contacted, and we’re playing out a variety of different scenarios, including what has been done by other nonprofits in other cities for similar situations,” Brucker said.
Barbara Riley ’73 GRD ’76, the head of school at Hopkins, said the prep school’s size and financial situation placed it in a much different position than Yale.
“There are ways in which we are already making an enormous contribution to community life, and there are numerous ways in which we already serve New Haven proper,” Riley said. “Because we are a tuition-driven enterprise with a modest endowment, the tax-exempt status is tremendously important to the financial well-being of the school.”
Riley said Hopkins had not discussed the possibility of making voluntary payments with the city. Spokespeople at Yale-New Haven Hospital and Albertus Magnus also said the city had not yet contacted them about the issue.