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New Haven Mayor: 20 Percent tax Hike Not Viable, City ‘Desperately’ Needs More State Aid

New Haven Mayor: 20 Percent tax Hike Not Viable, City ‘Desperately’ Needs More State Aid

New Haven Register, February 18, 2021

By Mark Zaretsky

Whichever way he looks at it, the impending $66 million city budget deficit adds up to the possibility of decimating city services, according to Mayor Justin Elicker.

Without additional state and other aid to the city, “it means we either have to cut $66 million or increase taxes enough to reach $66 million,” Elicker said.

But now there is “a good chance” Elicker’s call for a three-tier Payments In Lieu Of Taxes program will pass despite being left out of the state budget that Gov. Ned Lamont recently presented to the legislature, according to Senate Majority Leader Martin M. Looney, D-New Haven.  

That’s because a three-tiered PILOT reimbursement program, which would reimburse a greater percentage of the property value of tax-exempt properties to municipalities with smaller per-capita grand lists, would benefit many Connecticut municipalities, said Looney, who introduced a bill that would add it.  

The proposal is “to create a three-tiered program where the poorer communities would get 50 percent reimbursement,” Looney said.

PILOT refers to payments in lieu of taxes for tax-exempt properties that tend to be concentrated in Connecticut’s larger cities.

In New Haven, more than 50 percent of the property is tax-exempt, in part because of large academic institutions. In value, the quantity of nontaxable property in the city — including all city, federal and state properties, cemeteries, churches, railroad property, private hospitals and schools, among other categories, totaled $8.3 billion in 2020.

A disappointed Elicker — as leader of a city facing a $66 million shortfall in the coming year’s budget — pledged to work with the city’s allies in the legislature to secure “desperately needed revenue” for New Haven through an expanded state PILOT program.  

He said Friday that he has “been in conversation with the governor and the governor’s office for many weeks about New Haven’s challenges, the state’s challenges and practical ways to address them.” Elicker said he has not spoken to Lamont since the budget was released, but plans to testify at a public hearing on the tiered PILOT proposal on Tuesday.

Elciker noted that if New Haven were to have to raise taxes to cover the deficit, it would mean a 20 percent increase for city residents and businesses, Elicker said. In placing context on a $66 million cut, he noted the Police Department budget is $43 million, while the library’s budget is about $4 million.

“Neither one of those viable,” Elicker said. “We need more than $66 million to function effectively as a city. We need more than $66 million if we are really going to move the dial on the issues we are facing.”

Elicker acknowledged the city could receive more than $88 million if the next federal relief bill were to be approved, but noted that the bill has not passed. Further, he said, “this is going to be the problem every year” and not just this year.  

Elicker also said he thinks the state’s surplus and/or higher taxes for the state’s wealthiest residents could help.

“The state has a rainy day fund that is meant for a rainy day — and this is a rainy day,” he said. “If now is not a time to raise taxes on the rich, I don’t know when is.”  

But Elicker also said “it is important to note “that the foundation of Sen. Looney’s proposal is twofold.” First, it would help “many, many municipalities around the state; it’s not just focused on one city or town.”

Secondly “it does focus on taking need into account,” Elicker said.

Looney said tiered PILOT reimbursements are a measure that can gain broad support.

“I believe that that equity argument is strong and compelling and I think we stand a good chance” of seeing it pass, Looney told the New Haven Register. “I think there’s broad-based support for it.  

“While most communities don’t have private colleges and hospitals, almost all communities have at least some state property,” Looney said. “This is just the very start of the process. Now our Appropriations Committee swings into action,” while “Finance, Revenue & Bonding will be working out the governor’s revenue side.”

The governor’s budget “is a starting point but doesn’t represent the final” budget, he said.  

32 towns would benefit most back to top

Under the proposal Looney put forward, the 32 communities that have net grand lists totaling less than $100,000 per capita would get 50 percent PILOT reimbursement, Looney said.

Among them, along with New Haven, Bridgeport and Hartford, are New Britain — number 169 among Connecticut’s 169 cities and towns with a per-capita net grand list of $50,329 — Waterbury, West Haven, Hamden, East Haven, Meriden, Ansonia, Derby, Naugatuck, Torrington, New London, Norwich and several other municipalities in eastern Connecticut, Looney said.

The 101 communities with net grand lists between $100,000 and $200,000 per capita would get 40 percent reimbursement.  

The 36 communities with net grand lists over $200,000 per capita — led by Greenwich with a per-capita net grand list of $734,668 — would get 30 percent reimbursement, Looney said.

Others on the over-$200,000 list include Darien, New Canaan, Westport, Washington, Salisbury, Roxbury, Cornwall, Sharon, Warren, Wilton, Weston, Bridgewater, Old Saybrook, Old Lyme, Lyme, Kent, Ridgefield, Sherman, Redding, Goshen, Westbrook, Stamford, Easton, Fairfield, Waterford, Madison, Norfolk, Essex, Norwalk, Stonington, Canaan, Farmington, Orange, Guilford and Avon.

The figures provided by Looney’s office came from the 2017 grand lists.

Elicker, who also called Lamont’s biennial budget “a starting point,” said about higher taxes for the very rich, “I think there is a way to do this without raising taxes on the rich.” But “it is not how I would choose to address the state’s financial challenges and ensure that we’re able to support communities that are struggling.”

He said in a statement the day the budget was released: “New Haven is facing a $66 million deficit in our upcoming Fiscal Year 2021-22 budget. The Governor’s inclusion of an additional $11.8 million for New Haven in the budget does not come close to addressing the financial challenges our city faces.  

“The governor has made clear he does not want to raise taxes on the wealthy,” Elicker said. “Let’s be clear, the governor’s unwillingness to raise taxes on the wealthy means effectively raising taxes on the working poor in New Haven.”

In response to Elicker’s concerns, Lamont Chief of Staff Paul Mounds said, “Gov. Lamont’s balanced budget provides predictability and affordability for Connecticut businesses and families.

“He proposed keeping all towns whole when it comes to education funding, and provided additional funding for distressed municipalities like New Haven to the tune of $100 million,” Mounds said. “The Office of Policy and Management, hand in hand with the Lamont administration, stand ready to work with New Haven.”

Elicker, however, said Lamont’s budget “is a starting point, and while I am deeply disappointed” that Lamont “chose not to include desperately needed revenue for our community through PILOT in his budget, I intend to work with our partners in the legislature to see that these dollars are secured,” Elicker said.  

PILOT reimbursements “are essential for our residents’ well-being and preventing a significant property tax hike on some of our state’s poorest people,” Elicker said. “I welcome the Governor to work with us to prevent this and provide a strong basis for which our city and state can recover.

Elicker said, “New Haven and other cities are economic engines for the state, critical partners in expanding testing and vaccination during the pandemic, and are central to our economic recovery.”

According to Elicker, “a bipartisan group of municipal leaders has been advocating for the funding for Tiered PILOT. The Governor mentioned in his address a Connecticut economy that “works for everyone,” he said. “Tiered PILOT is one of many levers we can pull to create equal opportunity for all.”