Wikimedia Commons
Lawmakers and Elm City officials hoping for the state legislature to increase its flow of funding to major cities will have to look elsewhere for increased revenue.
Last Wednesday, newly inaugurated Gov. Ned Lamont SOM ’80 released his first two-year budget proposal for the Nutmeg State. Though he proposed reducing the total levels of municipal aid granted over the next two years, Lamont also drafted keeping funding relatively steady for most of Connecticut’s major towns and cities. New Haven will see a slight, statistically insignificant increase with each fiscal year. Budget discussions will now turn to the state legislature before a final version for the upcoming fiscal year is approved.
“[Mayor Toni Harp] recognizes the work-in-progress nature of what the governor has proposed,” mayoral spokesperson Laurence Grotheer told the News. “With that said, she acknowledges what amounts to flat-funded municipal aid to New Haven and has some concerns about that, given the city’s growing regional responsibilities.”
Each year, state aid forms a significant portion of a city’s total revenue. Currently — under a budget initially proposed by then-Gov. Dannel Malloy for fiscal year 2019 — New Haven receives a total of $226.8 million in state dollars. Under Lamont’s new proposal, that number will move to $228.9 million and $231.6 million in fiscal years 2020 and 2021, respectively.
States are required to balance their budgets — unlike the federal government. Connecticut has struggled to reinvigorate its economy despite overall national growth since the Great Recession, and is projected to post deficits totalling $3.7 billion over the next two years, leading to an emphasis on cost-cutting and revenue-raising.
Lamont, a former telecommunications entrepreneur and executive, has rung the bell of fiscal accountability since he assumed office in January. In his first few weeks in office, he has emphasized the growing fixed costs in the state’s finances, which his office described in a press release as “crushing” and necessitating “structural changes.”
The Nutmeg State’s other large urban areas are facing similar challenges to those of New Haven. The state’s most populated municipality, Bridgeport, has struggled with comparable financial issues — limited means of revenue generation and ever-increasing costs for services such as education — and is currently funded at $216.5 million. Bridgeport will see a just-over-$2 million bump for each of the upcoming two years.
Meanwhile, Hartford is currently funded at $272.2 million. The capital city will see an increase of $3 million for the next year, and $3 million more the year after. In April 2018, Malloy chose to bail out the capital city over a 20-year period, a decision which many other cities lamented.
Given that Lamont has identified fiscal solvency as a primary and immediate target, officials in major cities were at least happy to not face any additional funding cuts.
The effectively steady provision of aid to the state’s largest cities comes as Lamont has slightly decreased aid to other areas to cut total municipal funding levels from current levels by $74 million in the next fiscal year and $17.3 million in the cycle after. The decreases, according to the legislature’s nonpartisan Office of Fiscal Analysis, will come mostly as a result of lowered contributions by the state to teachers’ retirement funds.
Ward 1 Alder Hacibey Catalbasoglu ’19, who had hoped that the Lamont administration would transition towards more funding for cities in its budget priorities, now acknowledges that he is just “glad Governor Lamont has not cut funding to New Haven.” Catalbasoglu cited, however, that the amount is still “not representative of how much New Haven deserves.”
In the Elm City’s budget for the current year, state aid was the second-largest source of revenue, coming up behind property taxes. Last summer, Harp implemented a highly unpopular 11 percent hike to property taxes, which generated just over half of the city’s budget dollars. About three-quarters of last year’s funds from Hartford were designated for education. In total, funds from the state, for education and otherwise made up just shy of 40 percent of the current year’s revenue.
Harp’s proposal for the city’s upcoming annual budget is due to the Board of Alders by March 1. Grotheer previously told the News that her breakdown would largely depend on the amount Lamont designated for the city.
The City of New Haven’s general fund for the current fiscal year operates at around $547 million.
Angela Xiao | angela.xiao@yale.edu