The city of New Haven faces a $66 million deficit and the mayor said has two different budget proposals, contingent on the level of funding from the state as well as Yale University.
One budget is the “crisis budget,” which includes a tax increase, employee layoffs and the closing of a library, firehouse, and senior center. The mayor said the city would be forced to adopt the “crisis budget” if New Haven does not receive commitments over the next several months of significant increases in funding from the state and Yale University.
“We wish to avoid this budget at all costs as it would significantly impact our City’s ability to function,” a news release from New Haven Mayor Justin Elicker’s office said.
The other proposal, contingent on the city receiving a significant increase in funding from the state and Yale University, would allow New Haven to continue services at the current level, according to the mayor.
Get Connecticut local news, weather forecasts and entertainment stories to your inbox. Sign up for NBC Connecticut newsletters.
Elicker released his budget proposals Monday. Both reduce the pension fund assumed investment rate of return from 7.75% to 7.25% and both cap annual borrowing at $30 million, which the mayor’s office said is the lowest in decades.
His office said the main driver to the $66 million deficit is “structural financial issues” that continue to worsen each year: increased pension and debt costs, other fixed costs, and employee salary increases. His office said the ripple effects of the COVID-19 pandemic have also contributed to revenues.
“As of the day of the release of this budget, March 1, active and positive conversations are happening between my Administration and both the State of Connecticut and Yale University. We are hopeful that both entities will realize that we all need to be a part of a solution that sets us on the right course. The Connecticut General Assembly is considering a bill proposed by Senator Martin Looney that would significantly increase funding for New Haven through the Payment in Lieu of Taxes program that reimburses us for lost revenue from non-profit property. And our conversations with Yale University, which is the owner of the vast majority of the non-taxable property in the City, are progressing in a productive manner. Given the ongoing nature of these two initiatives and uncertainty of the result, I am releasing two potential budgets: the Crisis Budget and the Forward Together Budget,” Elicker said in a statement.
Crisis Budget:
- Employee layoffs
- Closing Mitchell Library
- Closing one fire station
- Closing the East Shore Senior Center
- Eliminating vacant positions and other cuts.
- A 7.75% tax increase.
Forward Together Budget:
(If the City does receive a significant increase in funding from both the State of Connecticut and Yale University)
- City would continue services at the current level
See the mayor’s proposed budget for FY 2021-2022 can be accessed here. For more information, view Mayor Elicker’s video breakdown of the budget.
The mayor submitted the budget to the Board of Alders and the Finance Committee will host several public hearings over the coming months.
