The last time Mayor Toni Harp proposed an increase to the Elm City’s tax rate was in 2014, during her first year as mayor.
Now, four years and no subsequent tax increases later, Harp is proposing another property tax hike — this time, by 11 percent. And New Haven residents aren’t happy.
Harp took office in January 2014, six years after the Great Recession devastated the United States’ economy. Since then, Harp has proposed five budgets in total, responding to the economic dynamics of the national and local economies. In her first budget proposal for the 2014–2015 fiscal year, Harp pitched a 3.8 percent property tax increase, noting that it was important for New Haven to seek a sustainable, long-term financial path rather than a series of short-term solutions.
This 2014 tax proposal angered many New Haven residents, who attended government meetings in crowds to testify against the increase. Ultimately, the city adopted a less drastic tax hike of 1.8 percent, cutting funding from city departments to make up the difference.
The following years, in 2015 and 2016, Harp’s proposals did not seek to increase property taxes in the city. During this time, City Hall generated revenue through construction and building permit fees and trimmed funding for overtime pay in the fire and police departments. Without proposed tax increases, public hearings were sparsely attended and discussions centered on which projects should receive more or less funding.
In 2017, Harp proposed a decrease in the current property tax rate by 7 percent. But this budget had unique time-consistency issues due to the budget holdup on the state level. Because the Connecticut state budget was not adopted until October 2017 — while the 2017–2018 fiscal year began on July 1, 2017 — the Elm City faced significant fiscal uncertainty and potential cuts in state funding, especially to the Board of Education.
“It’s important to remember the extent to which New Haven is utterly reliant on state funding to balance its budget,” Harp said at a City Hall meeting last year introducing her proposed 2017–2018 budget.
Fast forward to March 2018, and New Haven faces the worst fiscal crisis of Harp’s tenure as mayor. The state has reduced aid to many municipalities and fewer people are purchasing construction and building permits in New Haven. The Elm City also needs to devote more funds to the Board of Education, as the New Haven public school system operates at a deficit. The only municipality receiving significantly more aid than last year is the state capital — Hartford. The state is bailing Hartford out of its fiscal crisis, giving it an additional $40 million this year, money that could have gone to other cities.
“Every year the proposed budget must articulate the city’s dedication to provide essential services in the form of public safety, public education and economic development often in the face of dire needs elsewhere,” Harp said in the letter introducing her 2018–2019 proposed budget. “It is safe to say that this proposed budget is the most difficult one I have had to submit.”
This 2018–2019 New Haven budget proposes an 11 percent tax hike, a depletion of the rainy-day fund and concessions from municipal employees. But New Haven residents and alders have decried the 11 percent tax hike as ridiculous.
“The answer to all of these spending increases should just be no,” one resident, Gary Doyens, said at a public hearing in early April.
At the hearing, residents complained they just could not see changes in the city that warranted an 11 percent tax increase. Doyens suggested that the city simply does “less with less.” He rejected the idea of a “social media queen” in City Hall — a proposal for a mayoral Facebook, Twitter and Snapchat specialist. He called for combining services to eliminate overhead cost and to shed increased spending.
Mohit Agrawal GRD ’20, a member of the Financial Review & Audit Commission, told the News that the city also has to be careful because New Haven faces increasing costs in its “nonfunctional budget.” As medical, pension and debt service costs continue to escalate, the city has to find increased revenue or additional cuts, he said.
“Unfortunately, these nonfunctional costs will continue to rise over the medium to long term, so without new revenue sources our city’s budget will only continue to become more strained,” Agrawal said.
New Haven Economic Development Administrator Matthew Nemerson SOM ’81, said New Haven has turned to a tax increase only because it lacks alternatives. He told the News on Saturday that although the state is providing Hartford with more funding, Hartford residents pay less in taxes than New Haven residents. Though Hartford has a higher property tax rate, its city government also issues a smaller assessment ratio — the percentage of the property value residents pay taxes on, Nemerson said. Thus, Hartford is receiving increased state aid and facing no tax increases, while New Haven receives less state aid and faces a looming 11 percent tax hike.
Nemerson said he hopes that the lack of aid does not hurt New Haven’s growth potential.
“We are one of the faster growing cities in New England, and if our taxes go up, if we don’t have funds to do interesting things to make the city more livable, we will choke off one of the fastest growing and best sources of growth for the state and new jobs to the region,” he told the News in early March.
Harp’s third term and sixth year as mayor ends on the last day of 2019.
Ashna Gupta | email@example.com