Tuesday was not a day for looking back.
Before a blue backdrop bearing the slogan “Improving New Haven. Again,” Mayor John DeStefano delivered a sobering overview of the state of the city’s economy and the fiscal measures — including nearly three dozen layoffs that have been the source of speculation for weeks — that New Haven will take to maintain a balanced budget for fiscal year 2008-’09. At the City Hall press conference, he said the time ahead for the city, for the state and for the nation would not be an easy one.
“We must prioritize … between what is essential and what is desirable,” he said.
The mayor’s plan for balancing the projected $6 million hole in this year’s budget includes laying off 28 city municipal employees and seven more under the auspices of the Board of Education. Those layoffs will take effect Friday, though employees will be given at least two weeks of severance pay. The mayor declined to discuss specifics about where the cuts would take effect — other than saying they would be mostly from “mid-level management” city personnel — because he said the city wanted to inform the affected workers directly first.
Larry Amendola, president of Local 3144, the city management union, said later in a phone interview that he thinks his union will take the brunt of the layoffs. He said the city informed him that 16 people in his union will receive termination notices.
If layoffs had to be made, he added, the city should have done more to distribute the hardships across all the unions in New Haven.
“I don’t like the way things got done,” Amendola said. “I know the mayor’s trying to do everything feasible, [but] … everyone ought to be sitting down and looking for ways to save.”
Perhaps not surprisingly, DeStefano’s overall message of rethinking economic and social priorities as the city moves forward echoed his remarks Monday night to the Yale College Democrats.
Gone, though, was the exuberant rhetoric, the call to activism and action on the part of Elis who are just becoming members of the New Haven community. In its place was an acknowledgement that the immediate problems would likely hurt the city in the short run.
“I think there will be some impact on city services” as a result of the impending layoffs, DeStefano said soberly, following his prepared address.
But even as cuts are made, the mayor said the city will hire some new employees, including public-school nurses, police officers and a permanent city assessor.
The reduction in staff levels will cover $3.6 million of the deficit, DeStefano said. Another $1.2 million will come from early retirements and by delaying the new police class. The final $1.2 million, DeStefano said, was filled by reducing the price the city pays for electricity, solid-waste disposal and health care for its employees after city staff went out to bid and managed to obtain lower rates.
DeStefano sought to place the city’s economic troubles in the context of similar problems in other Connecticut urban municipalities, as well as the larger national economic downturn. He pointed out, as he did last week at a press conference announcing that the city had run a surplus last year, that both Hartford and Bridgeport ended the last fiscal year with millions of deficit, while New Haven came out $750,000 in the black.
Over the next few years, he said, the state’s big cities will face significantly greater financial pressure than the state’s more rural communities. Bridgeport, Hartford and New Haven contain 39 percent of the state’s low-income housing, 27 percent of its probation population and 25 percent of its parole population, he said.
“The collapse occurring in the U.S. financial markets [will lead] to a reduction in state income taxes,” he said. “Lack of capital and greater scrutiny … will slow down economic development.”
That slowdown, in turn, will trickle down to the cities in the form of less property-tax collection and less aid, likely in the form of continued non-payment of Payment in Lieu of Taxes, or PILOT, funds, which are intended to reimburse cities for tax-exempt properties, DeStefano added.
But DeStefano said that as worsening economic times eventually force state funding cuts, “regional burdens need to be regionally supported.” Urban areas should be not be expected to bear the burden on their own, he said, without support coming from the rural tax base as well.
Republican Sen. William Nickerson explained last spring, when negotiations for more PILOT funds were underway, that while he supported the underlying purpose of the PILOT program, he did not believe additional taxes should be used to fund it.
“Both Republican and Democratic leaders have made the observation that we are in or near a depression,” he noted, in an April interview.
Gov. M. Jodi Rell has said over the past year amidst economic turmoil, fiscal restraint is imperative, and she has said that major cities already receive a substantial portion of state aid, especially in the area of public safety.
The mayor attempted to color his message with shades of optimism, emphasizing that with mutual support and hard work, the city could maintain quality services.
But there was no glossing over the layoffs, especially amid inauspicious turmoil in the national financial markets. Perhaps the best indicator of the severity of the situation was the mayor’s own response to a media member’s question about whether the layoffs might not have been avoided entirely.
“Frankly, I’m glad the number is not higher,” the mayor responded, tersely.