As city officials plan their budget for the 2007-08 fiscal year, they are blaming a drop in New Haven’s share of state revenue for some of the city’s financial difficulties.
Data in Gov. M. Jodi Rell’s proposed budget indicates that many of the state’s largest cities, including New Haven, are seeing their share of state revenue fall. City officials told the Board of Aldermen’s Finance Committee on Tuesday that the drop in the Elm City’s share of total state revenue — which represents an earnings loss of $17.6 million — has required the mayor to propose a $12 million increase in property taxes in this year’s budget. But state officials said that although the Elm City’s share of state contributions to cities declined from 9.3 to 8.5 percent, New Haven will actually receive an extra $10.3 million from the state this year.
Adam Liegeot ’94, a spokesman for Rell, said the governor has responded favorably to calls from city officials to invest in education. The governor’s $50 million increase in state education spending for the city will represent a 39 percent increase in funding from what New Haven received last year, he said.
“For decades, the city has been clamoring for this aid, only to be brushed off by past governors,” he said. “Governor Rell has stepped up to the plate and delivered for New Haven and for cities and towns across the state, and she is expending considerable political capital to do so.”
But Rob Smuts ’01, the mayor’s deputy chief of staff, said that while he is very pleased with the governor’s effort to increase funding for education around the state, he is concerned that some of the specific details of Rell’s budget proposal are not in the best interest of the Elm City.
“We do applaud the boldness of her initiative, but we have some concerns about the specifics of her education proposals … [and] several of the other funding streams,” he said. “We will be working with our state delegation to work on our concerns and what may eventually be passed.”
Smuts said the city administration is also concerned with the state’s proposed $1.4 million cut to its Payment in Lieu of Taxes program for New Haven, which provides state money to make up for tax-exempt properties, including the University and Yale-New Haven Hospital. By cutting the PILOT program, he said, the state government discourages the growth of non-profit organizations that have a large impact on the city economy even though they do not pay property taxes. The University and the hospital are the two largest employers in the city, for example, and make annual contributions to the city of $6 million and $987,500, respectively.
“The pilot program has been very successful in changing the dynamic that had previously opposed the growth of non-profits,” Smuts said. “Much of the economic growth we are seeing is related to those institutions.”
University officials have also been involved in lobbying efforts this week to increase the size of the PILOT program. Associate Vice President of the Office of New Haven and State Affairs Michael Morand ’87 DIV ’93 said he testified at the legislature in Hartford on Monday, and is confident the lobbying effort in which the University is currently involved will be successful by the time the state’s final budget is approved.
“We will, with our sister institutions throughout the state, continue to urge the legislature to maintain an increased PILOT,” he said. “Connecticut remains far and away the national leader, and I am confident that the legislature will increase funding recognizing that there are many weeks to go before the actual budget is adopted.”
The city’s $445.2 million budget proposal, which DeStefano unveiled last week, includes a $29.5 million increase in expenses to fund new programs and the hiring of 14 new police officers.