“We are in a financial crisis.”
Last week, Mayor Justin Elicker spoke to me over the phone for an interview. He explained that the city is currently preparing its budget for the upcoming fiscal year, which will run from July 1 to June 30, 2022. There is a potential $41-$66 million deficit just to continue providing the current city services, such as public safety and libraries. Services that, according to Mayor Elicker, already need improvement. And New Haven can’t fix the deficit — the city has already raised taxes and cut certain programs just to get to this point.
I recently phonebanked for the local organization New Haven Rising. We were calling New Haven residents to ask them how they felt about Yale and Yale New Haven Hospital’s property tax break — or, the $157 million Yale does not pay in property taxes each year, which causes the city to lose revenue on that tax-exempt property. Every single person I talked to expressed dissatisfaction, and they were happy to spend as much time as it took to have a proper conversation. When I ran the numbers on their home addresses and told them that they could be paying thousands of dollars less in yearly property taxes if Yale paid its own — without a diminishment of city services — I could hear the surprise in their voices.
We were also asking residents to attend a virtual Martin Luther King Jr. Day event. It sought to call on Yale, Yale New Haven Hospital and elected leaders to help New Haven families recover from the current economic crisis. Over 600 people later attended the event, and New Haven residents were clear about their desire for the University to contribute more to the city. When participants at the event were surveyed and asked how much money they thought the University should be paying the city, the majority of people answered the whole $157 million.
Mayor Elicker agrees that Yale needs to be contributing more. During our interview, he said that the solution to the looming deficit is Yale increasing its annual contribution to the city, as well as help from the state.
“Yale contributing more is important both for the success of New Haven and Yale,” he argued. Yale should want to attract students to a thriving city rather than a struggling one. But he also believes that it is Yale’s ethical responsibility to pay its fair share to the city that it calls home.
I reached out to the University for a phone interview as well, but was not able to receive one.
As students, we owe it to New Haven to join in its fight to push Yale to contribute more to the city. Yale’s nonprofit status allows the institution to be exempt from paying property taxes, but Yale should significantly increase the $13 million it pays the city as a “voluntary contribution.” Yale has argued that the $13 million annual contribution is more than any other American university gives to its host city, but as Matt Smith wrote in his piece for the New Haven Independent, the contribution is only 2.4 percent of New Haven’s annual budget. Smith references Princeton University, which agreed to pay $3.4 million to the city of Princeton, New Jersey. Princeton’s endowment is also $26 billion, or $5 billion less than Yale’s, and this payment makes up 5.25 percent of the town’s revenue. If Yale were to contribute the same percentage, it would pay $28 million to the city of New Haven.
There is no legal requirement that Yale give anything more to the city than the $5 million it pays yearly in taxes for its non-academic property. But what a terrible world this would be if we only did the things to which we were legally bound. This city has given so much to Yale and its students — more than it can afford to. The time for Yale to step up is past due. Moreover, the communities that are going to be most severely impacted by New Haven’s financial deficit are its most vulnerable. These are the same populations that have been suffering the harsh brunt of economic policies for decades.
During the 2019-20 fiscal year, Yale had an operating budget of approximately $4.3 billion and ended with a surplus of $125 million. While Yale does make a contribution through its payment and by providing jobs, it pales in comparison to what the University could be contributing. Moreover, the strain we are putting on the city has only increased: Almost 60 percent of New Haven’s property is now tax-exempt, largely due to Yale and the hospital’s expanding valuable property. 60 percent is almost $8 billion worth of value that cannot be taxed, compared to the remaining $5.71 billion of taxable real estate. New Haven is struggling to keep itself afloat while Yale continues to be one of the wealthiest institutions in the world.
Yale will continue to say that students are one of its top priorities, and we as students cannot let ourselves be used as a scapegoat. While we continue to enjoy what Yale’s wealth offers us, we have to understand how our comfort comes at the expense of an entire city. A city whose services we continue to benefit from, and a city that will house us for at least four years of our lives. Writing about the need for Yale to pay its fair share is prevalent, both in Yale’s student publications as well as New Haven’s local papers and magazines. There are residents, local organizations and elected officials who are fighting to hold Yale accountable, and it is not difficult to join their efforts. In fact, it is our ethical responsibility to do so.
DEREEN SHIRNEKHI is a sophomore in Davenport college. Her column, titled ‘Interlude,’ runs monthly. Contact her at firstname.lastname@example.org.