Of all the major cities in Connecticut, New Haven is proposing the largest property tax hike — 11 percent.
Currently municipalities across the state are in the process of adopting their budgets for the 2018–19 fiscal year, which begins on July 1. This year, many cities faced cuts in state aid, largely as a result of the state using a large portion of their budgets to bail Hartford out of its fiscal crisis. But while state funding has decreased across the Nutmeg state, New Haven’s resultant tax hikes have been especially steep: Mayor Toni Harp’s proposed budget increases taxes at least twice as much as any other municipality’s proposed budget would.
In recent weeks, Harp and other New Haven city officials have questioned the fairness of how the state decides municipal funding. According to the current state budget plan, Connecticut will cover $550 million of Hartford’s debt over the next 20 years. With interest, that will amount to about $750 million.
Decreases in state aid and building permit fees will put New Haven $17 million short in revenue, according to the mayor’s proposed budget numbers. Harp has openly criticized the state, questioning how it allocates money, since New Haven is receiving $5 million less this in Payment in Lieu of Taxes — money given to municipalities to reimburse them for tax-exempt properties in the city — even though tax-exempt properties are increasing, according to mayoral spokesman Laurence Grotheer.
In March, Harford Council President Glendowlyn Thames defended the state’s allocation of funds in an interview with the Hartford Courant, saying that the state was simply trying to prevent the city from slipping into bankruptcy, which “long-ranging repercussions for the region.”
On Monday, Hartford Mayor Luke Bronin ’01 LAW ’06, announced Hartford’s budget proposal, highlighting the importance of a vibrant capital city to a state. The budget did not include any tax hikes.
“As we have confronted our fiscal challenges, we have highlighted the fact that, if we hope to build a strong and vibrant Capital City, we cannot not tax or cut our way out of our crisis at the local level alone,” Bronin said in the opening statement of his proposed budget.
In the statement, he repeatedly acknowledged his relationship with the state, noting that the partnership allows the capital city to maintain a balanced budget without any one-time revenues, without any asset sales and without deferring pension obligations.
Bronin also said the budget will remain tight. Although Hartford is not increasing tax rates, Hartford residents pay a mill rate — which is used to calculate property taxes — of 74.9. Hartford has the highest mill rate in Connecticut and one of the highest in the nation. By contrast, Harp has proposed increasing New Haven’s mill rate to 42.98 mills. Bridgeport also has a higher mill rate than New Haven, at 54.37.
When it comes to increasing taxes, other municipalities such as Stamford, Mansfield and Danbury are all proposing increases to their property tax rates, but none by more than 5.68 percent. Bridgeport’s proposed budget calls for no tax increase.
New Haven residents have expressed outrage over the proposed tax hike, many saying it would simply be unaffordable. At a public hearing at the beginning of April, residents expressed their anger and confusion saying they do not see changes in the city that amount to the money they are paying through taxes.
“Last year I paid a quarter of my income in house taxes,” said one New Haven resident Debbie Rossi. “That is unsustainable.”
Residents complained that the tax increases would drive away New Haven locals who have lived in the city for generations.
Seniors in the Elm City and other cities have expressed particular concern because their incomes will remain fixed despite raised taxes.
In budget hearings across Danbury, seniors complained about their tax burdens, according to local Danbury newspaper The News-Times. But in Danbury, the tax rate is going up 3.87 percent, only a fraction of the Elm City’s proposed 11 percent hike.
In an interview with the News after the release of the proposed budget, New Haven Economic Development Administrator Matthew Nemerson SOM ’81 said the city did not have many alternatives to the tax hike. He noted that New Haven has less revenue and more mandated spending for institutions, such as the Board of Education, than other municipalities in the state.
In her opening proposed budget statement, Harp acknowledged that this was the most difficult budget proposal she has ever had to draft. The Board of Alders is set to pass an amended budget by its first full board meeting in June. Hearings and committee workshops on the budget will continue through May.
Ashna Gupta | ashna.gupta@yale.edu