James Larson, Senior Photographer
According to Yale’s Office of New Haven Relations, the Elm City has a lot to be thankful for.
On the office’s “About Yale and New Haven” page, the University states it is the largest contributor to the city’s budget other than the State of Connecticut. The site says that Yale pays New Haven roughly $15 million annually in “taxes, voluntary payments, and fees,” which the University says help fund schools, safety and other services. Yale’s $13 million voluntary payment, up $1 million for Fiscal Year 2020-2021, which started on July 1, 2020 and ends June 30, 2021, makes up the bulk of that spending. The University is New Haven’s largest employer — and, according to Yale officials, its key tourist attraction and one of the city’s biggest sources of community volunteers.
And yet, many leaders in the city of New Haven describe Yale’s contributions to the city as small, inadequate and in need of immediate reform.
“[Yale] has a $4 billion annual operating budget, and they contribute $15 million to the city of New Haven,” New Haven Mayor Justin Elicker told the News. “There has never been a more important time for the University to follow through on its ethical responsibility to the city.”
Local social justice organization New Haven Rising is one of the groups spearheading the effort to increase contributions to New Haven from the University and Yale New Haven Hospital. A petition from their “Yale: Respect New Haven” campaign — which has more than 2,500 signatures — asserts that Yale’s refusal to “contribute their fair share” is part of the reason why the city has struggled to address inequality and poverty.
University spokesperson Karen Peart said that if the University spent more, it would not be maintaining a “prudent level of spending” from its endowment based on “sound economic theory and analysis.” She added that Yale’s $12 million voluntary payment to New Haven in Fiscal Year 2019-2020 was “the highest from a university to a host city anywhere in the United States.”
“This is as much as we can responsibly spend without unfairly taking from those who will come after us,” said Peart. “The strength we are experiencing derives from the generosity and care of those who came before us, and we have similar obligations to the future students, faculty, and staff of this university.”
But many New Haveners say Yale has an obligation to the city, too.
According to a report released by DataHaven last year, the city’s poverty rate sat at 27 percent. More recent reports say that number has increased during the coronavirus pandemic, particularly for residents of color.
At the end of October, Yale released its annual financial report, detailing endowment figures, revenue sources and enrollment statistics. According to the report, the University finished the year in a “strong financial position,” even generating a net surplus of $203 million. The surplus is nearly 14 times Yale’s annual contribution to New Haven.
Included in the report was a message from University President Peter Salovey in which he congratulated the Yale community on “carefully managing” its financial resources. He also thanked his colleagues for “coordinating” with New Haven and the state.
Elicker, however, said that given the large surplus reported by the University, it is clear that the largest obstacle to the city receiving more money from Yale is simply the willingness of Yale’s leaders to invest in their home. A key promise of Elicker’s campaign for office was seeking an increased financial commitment from Yale — $50 million a year, to be exact.
“I think that the University’s position on this is disappointing and frankly immoral,” Ward 1 Alder Eli Sabin ’22 said.
Elicker declined to give specifics concerning ongoing financial discussions with Yale but emphasized that his office and the University “are talking.” He listed issues New Haveners face that an increased contribution from Yale could help combat. For example, he said the University could help give newly released prisoners a network of resources and provide funding for housing to reduce New Haven’s homeless population. Additionally, he said, Yale could help the city avoid cuts in its existing programs due to budgetary concerns.
Elicker also highlighted the issue of education when asked about the potential impact of an increased financial contribution from Yale. He said the city could use additional funds to put a librarian, guidance counselor and social worker in every school in New Haven. He did not specify how much additional funding would be required to carry out that plan.
But Peart said that Yale has already promised a $1 million increase in its voluntary payment to the city for the fiscal year beginning July 1, 2020. According to Peart, Yale also commits significant resources to New Haven public schools through New Haven Promise, a scholarship program promoting college education for local public school students.
“Yale contributed $4 million this year to cover full tuition at any public university in Connecticut for eligible New Haven public school students,” said Peart. “Yale is working with the city to get through the pandemic together and will continue to do so.”
Local unions and New Haven Rising said on their website that Yale’s tax-exempt status means that the Elm City has lost $146,079,896 in annual taxes. State and federal legislation allow institutions to gain tax exemptions on educational and administrative buildings. According to the city’s non-taxable grand list in 2019, the value of Yale’s tax-exempt properties lies at $3.54 billion. That amount has been steadily increasing over the past six years due to the University’s consistent investment in its facilities.
Rev. Scott Marks, the founder of New Haven Rising, said taxes are not the only area where the University has failed to contribute its fair share. He told the News that Yale also does not hire enough New Haven workers, despite the University’s efforts over the past five years.
In 2015, Yale committed to hiring 1,000 workers from New Haven by April 2019, with at least half of them coming from low-income neighborhoods. Although the University succeeded in the first half of its promise, it failed to hire 500 people from low-income neighborhoods such as Dixwell and Newhallville.
“Yale should be hiring good, solid jobs in those unions, bringing [in] more of the people in order to not back up, but to move forward at this time in making sure that people have their lives filled with dignity,” said Marks. “COVID is creating a lot more opportunity for there to be a greater reach out with the huge resources that [Yale] has to feed people.”
In light of its failure to fulfill the latter half of the agreement, the University last year committed to 300 additional hires from “neighborhoods with high unemployment rates” by the end of 2021. Although that was put on hold temporarily due to a hiring freeze, Peart said the freeze has been partially lifted to hire faculty for Fiscal Year 2020-2021 — but the hiring freeze remains in effect for other staff positions. The University hired 239 academic, staff and construction workers during Fiscal Year 2019-2020, including 86 from neighborhoods in need.
Although Yale’s contribution to the city has been a cause of concern among some New Haven residents for years, Ward 21 Alder Steve Winter said Yale’s financial support is even more vital now in the time of the COVID-19 pandemic. Winter said that while he believes the city has done as well as it can to manage the crisis, additional funding would lead to a more comprehensive response.
The newly activated Yale Community for New Haven Fund was founded to help soften the negative impact of the pandemic on the Elm City. It has distributed over $2 million to local nonprofits to support residents negatively impacted by the pandemic.
Bob Proto, President of the Yale blue-collar union Local 35, said economic hardship and job loss due the pandemic may lead people to call out wealthy institutions like Yale to pay their fair share.
“I remember when they were a university before they changed into a hedge fund and started to talk about risk management and not talk about how to be a partner to the city,” said Proto. “They worried about their investments but they didn’t worry about the neighborhood surrounding their own college.”
The mayor also noted that Yale needs to recognize the damage the pandemic has done to New Haven’s long-term economic stability.
“It’s become overwhelmingly clear that New Haven will suffer permanent, long-term negative economic impact because of COVID-19,” Elicker said. “While at the same time it’s also clear that Yale University continues to thrive and prosper economically.”
According to Yale’s 2019-20 financial report, the University currently has an endowment of just over $31 billion.
Thomas Birmingham | thomas.birmingham@yale.edu
Natalie Kainz | natalie.kainz@yale.edu