According to Andy Ross, the City of New Haven is insolvent (unable to pay its debts). We have resorted to “financial engineering” to make our budget work (like borrowing from one credit card to pay another one’s monthly minimum payment). Read his informative article from the Grand News.
Contact your alderperson
to ask them about this article. We sent them all a copy of the article.
New York Times reports….
The City released a new budget document with the announced cuts.
No More Fair Rent Commission, Elimination of Small Business Initiative, $1M less in BOE, almost $6M in proposed layoffs and concessions while increasing employee benefits by a $1/4 Million, $679k from Community Services Administration, reduced soup kitchen aid, homeless funding, two people from the mayor’s office, $150k less to Shubert, $150k Less to Market New Haven and $250k less to Tweed. $144k from Executive Management Concessions (No Reduction for the Mayor who is still at $131,000. In fact no one in his office got a salary reduction although two positions were eliminated all together.). Elimination of some senior centers (there was low attendance at a few of these), closing some police substations, eliminated 3 Librarians, and more.
They estimate $1M in new money from an unannounced source (sale of parking lots?), increased money from parking meters, vital stats, and $150 per bulk pick-up.
See below for a NYTimes article and Harry David’s contextualization.
Note the size of Vallejo — 115,000 compared to New Haven/s 120,000. Vallejo’s payroll costs were 80% of the General Fund compared to New Haven’s 65%. New Haven’s Mayor will be proposing some modest payroll trimming that may not be sufficient. We have the experience of Waterbury to look to and to try to avoid going down the path of profligate spending in a constrained tax climate. Harry
US | May 8, 2008
City Council in Bay Area Declares Bankruptcy
By JESSE McKINLEY
The unanimous vote was cast after efforts to squeeze concessions out of Vallejo City employees failed and with the city facing a $16 million shortfall for the fiscal year.
The Mayor is proposing budget cuts to close the gap. See the coverage below as well as his letter to City Employees.
WTNH Coverage of Mayor’s Press Conference
Here is the letter:
Dear Colleagues:
As you may know, the State Legislature closed session for the year last
night without passing a new Fiscal Year 2009 budget. Therefore, the
State will operate under the tax and spending plans in the biennial
budget approved last year. The budget the State is working with results
in a difference for New Haven of $14.7 million between what we require
in aid and what they will in fact provide. With this challenge in mind,
in order to achieve a balanced budget by July 1, we are going to need to
make some sacrifices. These are sacrifices we don’t want to have to
make. However, we will do what we must and we will do this together as
one united team.
Our goal is to make the changes we need to make to meet the budget with
as minimal an impact on our delivery of services to residents as
possible. Throughout this process it’s important to keep the best
interest of our residents as a top priority. We will not raise the mill
rate. But, because of the revaluation phase-in, homeowners will see an
increase in their property taxes. This requires us to make budget
adjustments internally. It would be irresponsible to unfairly increase
property taxes beyond what taxpayers will see from the second year of
phase-in.
At 3:30 p.m. today at City Hall, I will lead a press conference to talk
about where we plan to save money and where we hope to make some money
back. The changes we discuss today are part of a proposed framework that
we will further develop to submit to the Board of Aldermen next week. By
not honoring its self-imposed obligation to reimburse us for tax-exempt
property in the City and by eliminating funding for important
programming, the State has left us with no choice but to make
concessions in our budget to avoid a deficit.
Over the course of the next several days and weeks, you will hear about
potential changes in programming, staffing and services. I will continue
to make it a point to keep you informed about how these changes may
affect all of us. Please know that we are working to achieve the most
minimal impact on day-to-day operations within the City as possible, but
some areas will undoubtedly experience a more visible impact than
others.
Each and every one of you works hard everyday for the people of New
Haven. Your work is valued and appreciated. Please relay any questions
or concerns to your department head who will also work to make sure you
are informed about this process.
Very truly yours,
John DeStefano, Jr.
Mayor
Here is the March 31, 2008 Monthly Financial report. It highlights the $10.6 Million shortfall for this fiscal year (2007-8). See you tonight at the final public hearing on the budget - Tuesday, 4/29/08 @ 7pm, City Hall.
We have heard from the BOA and City that there is nothing in the budget to reduce and that the budget represents mostly fixed costs. We also went to a recent budget panel discussion where this was also stated. So if nothing can be cut or reduced, we should be able to project taxes based on the current budget. Therefore, we looked at the recent growth in the budget and used very conservative growth/inflation projections assuming the budget will stay the same as the city said and projected the taxes. Take a look at our spreadsheet or PDF version of our projections and you decide. Send us your feedback.
Taxes are on course to rise with a mil rate of 73.24 in 2014 (six years from now). This translates into over $14,000 in taxes on a home worth $300,000 or around $400 per month for a renter of one floor in a 3-family in taxes to their landlord in a home worth $300,000.
Come to the final public hearing on the budget Tuesday, 4/29/08 at 7:00pm at City Hall.
Westville Dems wanted to let you know that they’re holding a panel discussion and Q&A on the New Haven city budget on Wednesday, April 23, from 6 to 8 pm at the Courtland Wilson branch of the Public Library. Leading voices from the Board of Alderman and the Mayor’s Administration, as well as a prominent citizen advocate for fiscal responsibility, will be discussing the 2008-2009 budget and the financial challenges the city faces in the next few years.
Panelists will include:
Carl Goldfield, Ward 29 Alderman, Board President, Finance Committee
Jacqueline James, Ward 3 Alderman
Jeffrey Kerekes, Founder, New Haven Citizens’ Action Network
Jorge Perez, Ward 5 Alderman, Finance Committee
Rob Smuts, Chief Administrative Officer, City of New Haven
The panel will be moderated by Paul Bass of the New Haven Independent.
The decisions made in the next several weeks as the Board debates the budget will have an impact on our taxes and our city’s fiscal health for years to come. If you’re interested in hearing multiple perspectives about the priorities shaping the budget, please come to the discussion, and bring your questions. There will be time for Q&A during the event.
The new budget document is expected out today. You can read coverage about the Mayor’s presentation last night at the NHI and NHR. Here are stories worth reading.
NPR: What Happens When City Hall Goes Bankrupt?
NHI: Mayor Proposes $466M Budget
NHR: Mayor proposes 4.6% boost in spending
NHI: Mayor’s Office Upgrades
NHI: Budget Watchdogs Release Plan
NHI: Stetson Library (Funding Restored, but interesting debate)
NHI: Tweed Peace Plan
We have a $17 Million shortfall this current fiscal year alone.
The below subsidies are rather small and dropping them should have minimal impact as the table clearly illustrates. Why do we need to subsidize the airport for $12.58 per flight? We can keep the airport, end the controversy among residents for $12.58 per flight. Compare $12.58 per flight with $6.03/rider of the trolley. From a subsidy standpoint, we would be better off flying people around then sending them by trolley. More seriously, the trolley is “free” to riders and only 9 people per hour? It looks like even when you give this service away, people are not interested. If it provides a service for those who are unable to walk, we could give them cab vouchers at a considerable cost savings.
| Subsidy | Amount | Tickets/Passengers/Flights | Cost Per unit |
|---|---|---|---|
| Tweed New Haven | $800,000 | 176 Flights/day | $12.58/flight |
| Shubert Theater | $410,000 | 93,000 Patrons | $4.10/person |
| Pilot Pen | $135,000 | 94,639 in 2007 | $1.43/Person |
| Downtown Trolley | $350,000 | 58,000 (9 People per hour) | $6.03/person |
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