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.
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.
(NHCAN) is pleased to announce the budget recommendations for the 2008-2009 Fiscal Year. We have prepared a list of recommendations including the ending of unsustainable subsidies, to the reorganization of departments, to the transformation of the budget document itself. Below you will find the link to the full document (2.3 MB), as well as, shorter versions of the document. We recognize that some of these recommendations may be impractical or even naïve. We invite you to consider these in the spirit in which it is offered and to offer superior alternatives for the general good. We look forward to continuing this discussion.
2008-2009 Budget Public Comments(2.3 MB)
Executive Summary Only (414 KB)
Full Document Without the Appendices (1.4 MB)
Appendices Only (2.0 MB)
Read the City’s Proposal for Cost Containment.
Here is one of our responses and suggestions for cost containment.
New Haven Citizens Action Network (NH CAN) was created last summer by a group of New Haven citizens who wished to participate in the deliberations of the Board of Aldermen during the 2007-8 budget process. Our objectives were to ensure that the proposed budget fiscally sound and would not create a tax burden on future taxpayers. We were also interested in keeping city government open to participation from the general public.
Summer has come and gone. The BOA has not welcomed citizen inputs and had prevented public comments on items before the Board. There is a solid majority of the BOA that votes as a block to approve the Mayor’s wishes without too much challenge. Consequently, New Haven CAN has shifted it’s focus – from working with the Alders to working to elect more independent minded Aldermen willing to check the Mayor’s propensity to tax and spend.
The New Haven 2007-8 budget totals $445 million, with Special Funds and Capital expenses adding another $272 million. This is equal to over $14,000 per New Haven household. Of this amount, about 30% is paid directly by City taxpayers, another 50% comes from State taxpayers with the remaining 20% being borrowed. The City has commitments of over $1,100,000,000 – about $22,000 per household — for pension liabilities, debt and retiree health care. Future taxpayers must pay for this.
The budget process is seriously flawed. There is no culture of cost control, of eliminating unnecessary activities to pay for new initiatives. Transparency is lacking. Education spending accounts for 38% of the General Fund. Yet one has to estimate the additional costs for employee benefits, pensions, debt service, the Capital and Special Fund accounts to get a better estimate of total education costs which are closer to 61% of total spending of $717 million.
The budget process is not integrated with the cost drivers that dominate the budget. Contract negotiations commit taxpayers for a good part of the budget, yet occur independently of the budget process. Pension plans still use the more expensive Defined Benefits approach rather than the more widely used Defined Contribution approach.
The budget process does not relate expenditures to any measures of anticipated outcomes. What should we expect for the $17,000 spent per school student each year? How effectively can we expect Police and Fire personnel to respond to incidents? For Public Works to repair sidewalks and roads?? Etc.. There is no reference to such benchmarks in the 400 plus pages of the budget.
Its a bad financial picture for the city. And the BOA just passed a back door raise for the city executives that should have been a part of the budget discussions. We need to begin discussing measures of success. What are we getting for the money we spend? Should we not reward executives based on the money saved or actual services delivered, rather than the money spent? See the numbers on where we stand and ask your alderperson and the mayor how they plan to address this financial picture?
We believe:
New Haven CAN be greater! New Haven CAN do better! IF
NH Can cut the budget
NH Can be fiscally responsible
NH Can root out wasted dollars
NH Can reign in unnecessary spending and dubious programs
New Haven Citizens Action Network (New Haven CAN) is a citizens action group comprised of New Haven taxpayers concerned about rising taxes and lack of fiscal responsibility in City government.
These New Haven taxpayers decided to form the New Haven Citizens Action Network (New Haven CAN) to raise public awareness of these issues. Every citizen of New Haven is encouraged to join and help make New Haven an affordable City in which to live.
This issue directly affects property owners AND tenants. While property owners see a direct impact on their costs, renters pay these same taxes as a portion of rent. With this huge increase landlords are forced to raise rents significantly. You can find out more about NH CAN at our website: www.nhcan.org
Last night the New Haven Board of Aldermen held a Special Budget Meeting and approved the budget for the 2007-08 fiscal year. The passage of the budget translates as higher spending and a significant escalation of taxes. Those increases will be reflected in the first half of your tax bill due in July 2007. You can see the results of roll call votes here: http://www.nhcan.org/boa-accountability-project/
Analysis:
It was encouraging to listen to the discussion about the budget and its potential to be trimmed. However, in the end, very little was cut and the results are major tax and spending increases for city residents and property owners.
There is a glimmer of hope with an amendment proposed by Finance Chair and major presenter Alderman Sergio Rodriguez requesting the Mayor report back to the BOA by September 1st on a plan to increase fiscal responsibility through performance based budgeting and changes in employee benefit plans. However, we feel the Finance Committee efforts ended as an appeasement to all of the citizens who hoped for substantial budget reductions. Ironically, those who voted for this favorable amendment, including Alderperson Rodriguez, also voted against very modest proposals to cut about $4MM from the budget.
These cuts would not have affected any services or cut any staff since the proposal by Alderman Jorge Perez simply eliminated funding for positions that must, for technical and practical reasons, remain unfilled.
Yet the majority of the Board voted this amendment down. Some offered explanations — Alderman Mattison objected to the lack of sufficient notice ( NH CAN knew about these positions by attending workshops and public hearings). Alderman Roland Lamar felt it would be “irresponsible” of him to cut these minuscule amounts without knowing the full impact on the performance of these departments (If these positions are not filled and won’t be how can performance be impacted?). We find this rationale lacking and insufficiently based on facts.
It was encouraging to hear Alderman Robert Lee inject some realism into the discussion by declaring that while this amendment did not propose staff reductions, the NH BOA should be prepared for these too. He aptly noted that private industry eliminates jobs all the time, especially in difficult times.
In the final votes amendments aimed at trimming the budget failed. The budget was approved almost exactly as proposed by Mayor John DeStefano and his Department Heads.
Out of almost three-quarters of a BILLION dollars in the City’s expenditures in the General Fund ($445 MM), the Special Fund ($134MM) and the Capital Fund ($137MM), our elected Aldermen could not find even $4MM to cut from programs and from personnel not yet hired. New Haven taxpayers will now face higher tax bills in June. Spending has has now reached about $717MM or approximately $5,700 PER PERSON!
We specifically commend those Alderpersons who voted against the budget, against increasing your taxes: Smart, Colon, Jackson-Brooks, and Lee. Thank you for refusing to be a rubberstamp for overspending. Thank you for placing your responsibilities to the taxpayers ahead of personal loyalties and fear of political retribution.
In addition to the above four Alders, we thank Alderpersons Perez, Paolillo, James, Lee, Atunes, Chen and Castro for voting for the budget cutting amendments.
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