Amidst recent pressure for increased funding for New Haven Public Schools, Mayor Justin Elicker announced a proposal directing $8.5 million to NHPS’s budget to mitigate staff layoffs and improve facilities maintenance.

After closing the books on the 2023-2024 fiscal budget on Sept. 30, New Haven saw a $16.4 million surplus in its general fund, marking the fourth consecutive year the city ran a surplus. Elicker proposed to put $3 million into NHPS’s operating budget. The remaining $13.4 million will be allocated to the city’s rainy day fund — which is money set aside in case of disruption to New Haven’s regular revenue. 

Elicker also proposed that $5.5 million of the city’s remaining American Rescue Plan Act funds, which must be allocated by the end of 2024, be given to the schools’ capital budget for building maintenance and improvement. Last year, the city set aside these funds as revenue replacement, for any potential gaps in the budget that would’ve needed closing.

New Haven Public Schools began this school year with a $2.3 million budget deficit, after receiving only $5 million of the requested $17 million increase in city funds to maintain the previous year’s programs.

Elicker’s proposal will have to be approved by the Board of Alders.

Additional NHPS funds will help close the deficit

“It’s a happy day for the schools,” Superintendent Madeline Negrón said. She expressed confidence that alders will approve Elicker’s proposal because “we are surrounded by individuals that are committed to making and upholding the promise of public education for New Haven public school students.”

To address the budget deficit, NHPS slashed $11.8 million worth of its previous services, Negron said, including a reduction in administrative operations. Elicker’s recommended additional $3 million will aid the schools in balancing their budget. 

Furthermore, the serious maintenance concerns plaguing 39 of 41 public school buildings are the result of years of failure to invest proper funds in the facilities. According to Negron, adequate facilities maintenance costs two percent of a property’s value per year. The schools are valued at $1.38 billion, meaning New Haven would be spending $27.6 million annually on maintenance to adhere to industry standards. 

By contrast, Negron said, the public school system was only able to allocate $16.6 million to its capital budget, which is used for facilities maintenance, renovation and construction. The additional $5.5 million coming from ARPA funding will “go a long way,” she said, toward informational technology and facilities investment.

“The reality is that [the schools] … need more, but unfortunately, because of salary increases and fixed cost increases and because of the challenges of the school deficit, they actually began with less,” Elicker said. 

In the last five years, New Haven has increased its contribution to the public schools’ budget by 48 percent. More funding, Elicker said, needs to come from state leaders — a claim education advocates and Elicker have been pushing as concerns for New Haven’s schools have worsened. 

Fourth year of budget surplus

According to Elicker, the primary drivers of the budget surplus were an additional $5.4 million in state tax funding allocation to New Haven and an additional $2.9 million in revenue from building permits. The city also had attrition and vacancy savings as it struggled in recent years to fill its budgeted positions. 

Although vacancies contributed to the budget surplus, Elicker ensured that the city was still “working very hard” to recruit people to fill those roles because the vacancies have put “a lot of pressure” on the existing city staff, who are picking up the slack from unfilled positions.

This is the fourth consecutive year New Haven has had a budget surplus, which Elicker credits to better expense and revenue initiatives. 

Elicker has sworn to cap borrowing at $30 million per year so that New Haven’s debt payments will go down over time. Elicker also worked with former Yale president Peter Salovey to increase Yale’s voluntary contribution to the city from $13 million to $23 million annually in 2021. 

Elicker said growth in New Haven has also increased tax revenue. In past years, city residents also saw property tax increases after a state-mandated revaluation in 2021.  

Elicker emphasized that while the budget surplus demonstrates great progress, the city still has a lot of work to do. According to Elicker, New Haven has $2.5 billion in unfunded liabilities — driven by underfunded pensions, $700 million in debt and healthcare payments to retirees. 

However, City Budget Director Shannon McCue emphasized that New Haven has taken great strides in developing reserve funds, going from a negative $10 million fund balance in 2018 to more than $50 million in reserves today.

“If we see any shortfalls, any kind of fiscal pressure, we will have reserves in order to address those and mitigate any of those pressures and continue to deliver services to the city, which is always most important,” McCue said.

Elicker is “quite confident” that the city will face “another challenging budget” when it comes time to plan the 2025-2026 fiscal year’s expenses.

Most notably, Elicker said, the New Haven Police Department’s union is reviewing an agreement that would ensure the police department pays competitive salaries. This would be a significant additional expenditure, ensuring the next budget season will continue to be challenging for the schools. 

The next Board of Alders meeting is scheduled for Oct. 7 at 7:00 p.m.