In the city budget he proposed to the Board of AldermenTuesday morning, Mayor John DeStefano Jr. said his mission was twofold: preserve school reform and prevent tax increases.
At a press conference at City Hall Tuesday morning, DeStefano unveiled the details of his proposed budget for the upcoming fiscal year, which raises spending 0.9 percent to $475 million and does not increase taxes. While the city is spending $8 million less on city services, total spending grew by $3.8 million because of the rising cost of city employees’ pensions and health care benefits. While DeStefano’s budget makes significant cuts in city services, the fight between the city and its unions looms over cost-saving reforms to employee benefits.
THE ‘PAC-MAN’ OF THE BUDGET
In what has become a familiar refrain at mayoral press conferences, DeStefano once again called city employee benefits packages unsustainable.
“[Pensions and healthcare benefits] are the Pac-Man of the city’s budget, consuming everything in sight,” DeStefano said.
Expenditures on city employee benefits have risen $11 million in the past year alone, totaling $105 million this year. DeStefano said the 82 layoffs he announced two weeks ago lost their jobs to pay for that increase, which he said is harmful to the city and is not fair to those workers.
While the New Haven Police Department will not see any new layoffs, four park employees and many more Board of Education employees will lose their jobs. DeStefano said the Board of Education layoffs may reach 190, including the 42 he announced two weeks ago.
Cuts in city employee benefits packages can only come from the city’s contract negotiations with its unions in the coming months. Eleven of those contracts expire June 30 and will need to be renewed, affecting the city’s budget for the next fiscal year.
DOING MORE WITH LESS
In order to prevent a tax increase, DeStefano will make cuts across the city’s budget.
Every city department except the Board of Education saw its budget reduced. The mayor’s office budget will decrease 7.5 percent from last year, the City Plan department will see a 9 percent decrease, and the city’s libraries will see a 10.9 percent decrease.
The Board of Education’s budget will stay constant for the third straight year as part of the city’s effort not to dampen progress on school reform.
DeStefano said much of the savings stem from the 96 positions eliminated from the city’s budget two weeks ago, which included the 82 workers who were laid off. Still more savings will come from cuts such as reduced library hours.
A major reason DeStefano was able to keep property taxes steady was the city’s improved economic performance. The city’s tax base grew 3.2 percent last year, faster than any other city in the state, affording it an extra $6.2 million in tax revenue.
NO TAX HIKES
DeStefano said he refused to raise property taxes in his budget for two reasons. First, the city has already raised taxes in three of the last four years. Second, under Gov. Dannel Malloy’s budget, taxpayers will already be seeing a sales tax hike and several new taxes.
After the press conference, city spokesman Adam Joseph responded to a complaint by Kevin Murphy, a city union negotiator, that the lack of a property tax increase puts an unfair burden on city employees to sacrifice.
“[The call for a tax increase] just goes to show you how deep in denial union leadership is regarding the city’s ability to sustain these plans,” Joseph said. “It’s time for union leadership to step up and work with the Mayor to control benefit costs to the taxpayers and extend the life of their own retirement plans.”
While there will be no tax hikes, residents will likely see other fees increase.
Under the city’s proposed stormwater authority, property owners would have to pay a runoff removal fee proportional to the amount of impervious surface area on their property. While the budget’s revenue projections are based on the expectation that aldermen will approve the authority, passage looks doubtful after Ward 30 Alderman Darnell Goldson nearly succeeded in killing the idea at the Board’s last meeting Feb. 22.
There will also be an increase in park fees, DeStefano said.
LABOR TENSIONS UNABATED
The mayor’s budget proposals showed no sign of easing tensions between the city and its labor unions.
Two weeks ago, in response to 16 police department layoffs, Sgt. Louis Cavaliere, police union chief, led over 200 rank-and-file officers in a rally from police headquarters at 1 Union Ave. to City Hall. During the rally, Cavaliere earned notoriety in the media for calling on city residents to arm themselves with weapons to compensate for the reduced police force.
DeStefano called those comments “inaccurate and irresponsible” last Thursday.
While there were no rallies Tuesday, labor leaders continued to feel as though DeStefano is trying to inflict pain on union workers without negotiating with them in good faith to find cost savings for the city.
DeStefano is playing a “blame the workers” strategy, said Larry Dorman, a spokesman for Council 4 of the American Federation of State, County and Municipal Employees, which represents five city unions. “The mayor continues to point the finger at public service workers instead of working with us to protect jobs.”
Dorman recalled a Feb. 5 meeting between DeStefano and representatives of the unions, two weeks prior to the announcement of the 82 city employee layoffs. Union leaders brought the mayor proposals for $5 million in cost savings to avoid layoffs.
But Destefano walked out of the meeting, saying the unions were not serious enough about reforming their pension and healthcare benefits.
Dorman added that property tax increases should have been on the table for this year.
“When you’re in a revenue crisis, you have to look at every option,” Dorman said.
DeStefano’s budget now goes to the Board of Aldermen, which must approve it in order for it to take effect. The new budget will take effect July 1, 2011.