$662.7M City Budget, 37.2 Mill Rate Proposed

by THOMAS BREEN

Many New Haveners would see taxes increase again — and the city’s budget grow by less than the rate of inflation — according to a $662.7 million general fund budget newly proposed by Mayor Justin Elicker. The mayor unveiled that latest annual fiscal plan Wednesday morning during a press conference held on the second floor of City Hall. Standing alongside City Budget Director and Acting Controller Michael Gormany, Elicker announced that he has submitted to the Board of Alders a proposed $662,720,609 general fund budget for Fiscal Year 2023 – 2024 (FY24), which starts on July 1. He also proposed a new two-year $55 million capital budget.
If approved by the full Board of Alders, the general fund would increase by 4.66 percent, or around $29.5 million, above the current fiscal year’s general fund budget of $633,192,672.
The mayor has also proposed a 6.42 percent drop to the mill rate, bringing it down from 39.75 to 37.20.

Combined with the second half of a two-year phase in of the latest citywide property revaluation, that lower mill rate would still mean that taxes would increase for many New Haven households.
Elicker said that one of his goals with this budget is to meet city residents’ demands for more public services without increasing the tax burden by too much. Therefore, with this mill-rate plan, he said, New Haven property owners should expect to pay a tax increase similar to the increase they saw last year. Since “many people saw their taxes go up” last year, Elicker said, those property owners should expect to pay similar amounts in increases this year.
The city’s spokesperson was not able to provide by the publication time of this article an estimate of how much on average taxes should be going up for New Haven property owners under the mayor’s FY24 plan.

Here are a few random examples of how the new rate will affect taxpayers: 

• A two-family house in Fair Haven that saw a 68 percent increase in assessed value from $103,600 to $174,300 thanks to the revaluation would see its annual taxes increase from $5,523 this fiscal year to $6,483 next fiscal year under the mayor’s FY24 budget. That same property would have had a tax burden of $4,545 last fiscal year before reval.
• A single-family house in East Rock that saw a 29 percent increase in assessed value from $399,070 to $517,230 thanks to the revaluation would see its annual taxes increase from $18,211 this fiscal year to $19,240 next fiscal year under the mayor’s FY24 budget. That same property would have had a tax burden of $17,511 last fiscal year before reval.
• A two-family house in the Hill that saw a 70 percent increase in assessed value from $62,090 to $105,910 thanks to the revaluation would see its annual taxes increase from $3,339 this fiscal year to $3,939 next fiscal year. That same property would have had a tax burden of $2,724 last fiscal year before reval.

“We are shoring up our finances so that we can hand a budget down, a city down to our children that is financially stable,” the mayor said, “and continue to provide the services to our residents and also to follow through on our commitment to our retired employees.” He added that, while his proposed budget would see the general fund increase by 4.7 percent, “inflation for this past year is 6.4 percent.” 
While the mayor’s proposed budget would add a total of 34 new full-time positions to city governments, primarily in the parks and police departments, and would increase city general-fund support for the public school system by $4.5 million, Elicker said that much of the proposed increase “is driven by fixed costs” such as pensions, debt service, and utilities.
Wednesday’s announcement marks the beginning of a two-months-plus budget-making process during which the alders will hold public hearings and workshops about the mayor’s plan before making any amendments and taking a final vote in late May or early June. Mill Rate Down To 32.7; Collected Taxes Up By $25M

The mayor’s budget proposal would also drop the mill rate from 39.75 to 37.20, or by a total of 6.42 percent. The mill rate is equal to $1 in taxes owed for every $1,000 in taxable property value. That planned drop in the mill rate, however, will not equate to a reduction in taxes for many New Haven households. That’s because the city’s taxable grand list is slated to increase by another roughly $175 million on July 1, bringing the city’s total taxable grand list to around $9 billion (or, to be precise, $9,074,490,724). That increase in taxable property values marks the second half of a two-part phase in of last year’s twice-a-decade revaluation. 
Last year saw the latest state-mandated citywide revaluation, during which New Haven city government tries to bring all properties’ taxable values in line with their so-called fair market values, or what they might sell for on the open market. The reval saw New Haven’s taxable grand list skyrocket by 32.5 percent. To soften the blow of higher taxable property values hitting all at once, the Board of Alders voted last year to implement a two-year phase-in – with one half hitting last July, and the second half set to hit this July 1. (That was a sped-up version of the five-year phase-in proposed by the mayor, which, while helping reduce the tax burdens for homes in areas that saw values jump significantly like Newhallville, Fair Haven, and the Hill, would also have provided a tax-assessment boon for luxury apartment buildings and megalandlords.)
What does all of that mean for property taxes in FY24?

Elicker and Gormany said that the city expects to collect around $25.6 million more in local taxes next fiscal year under the mayor’s current budget proposal, including the 6.42 percent mill rate drop. According to the mayor’s budget book itself, collected property taxes under this general fund proposal would increase from $298.7 million to $324.3 million, or by around 8.5 percent.
While New Haven’s tax rate is high, the mayor conceded, it’s actually lower than mill rates in other Connecticut municipalities like Hartford, Bridgeport, Waterbury, Hamden, and West Haven.
Asked about what he would say to city residents wary of another de facto tax increase at a time when the city has seen significant increases in financial aid Yale, state government, and the federal American Rescue Plan Act (ARPA), the mayor replied, “we work very, very hard to balance what I hear across the city about people wanting more services. … People are demanding more services from the city. We want to deliver that. At the same time, we want to make sure that we’re no putting an undue burden on people by significantly increasing taxes. It is not easy to strike that balance.”
While the city has received more than $100 million in federal ARPA funds, those monies have to be spent in just five years. “We have focused on using those funds in a way that doesn’t increase a lot of the long-term general fund liability for the city,” he said.
“It’s a balance,” Elicker repeated. “I think we’ve struck the right balance here. I also acknowledge that it’s a struggle for people.”

So. What kinds of services would this new $662.7 million mayor-proposed general fund budget fund?
This budget “maintains our commitment to the priorities we have set in advancing economic growth and opportunity, public safety, affordable housing, education, youth and community programming, and the delivery of city services that enhance our quality of life,” Elicker wrote in the introduction to the budget book.
Some highlights include: 

• The creation of 34 new full-time general fund positions, including one lieutenant, three sergeants, three detectives, and two animal control officers in the police department, and four caretakers, two parks rangers, and one parks foreperson in the Department of Parks & Public Works. The new public-safety leadership positions should increase “support [for] officers on the street” while also “allowing mobility within the department” in terms of creating more space for promotions. The new parks positions, meanwhile, will allow city staff to better respond to “things that are broken, to fix the trails, to ensure that trash is cleaned up” and to support parks volunteer friend groups, the mayor said.
• The increase in the Board of Education’s budget by $8 million. Elicker said that the city expects that $3.5 million of that increase will come from a bump to the Education Cost Sharing (ECS) grant sent by the state to the city. The remaining $4.5 million city-to-schools budget bump will be covered by the general fund. Elicker said that one of the larger drivers to the proposed schools budget increase is the new teachers union contract, which promises a 15 percent salary raise over three years and which he said should work to attract new teachers and retain existing staff. In total, the mayor’s budget would see the city’s financial contributions to the school system increase from $195,263,784 to $203,263,784.
• The reduction of the city’s anticipated rate of return for the public pension funds from 7.25 to 6.9 percent, along with a $2.1 million increase to the city’s combined annual pension fund contributions. In total, the city would see its annual contributions to both the city and police and fire pension funds increase from $80.8 million to $82.9 million, making up a total of 12.5 percent of city expenditures for the year.
• Gormany described other fixed-cost increases as including a $1.5 million hike to the city’s “liability insurance” and $3.8 million more for debt service. He added that police overtime would go up by $1 million and fire overtime by $900,000 under the proposed budget.
• The shifting of the public library department from the Chief Administrative Office (CAO) to the Community Services Administration (CSA) and the increase in the library director position’s salary from $110,000 to $145,000 per year to bring that still-empty role more in line with what top librarians make in other cities in the state.
  The shifting of existing city finance staffers into a new Office of Policy, Management and Grants responsible for the preparation of the city budget and of multi-year financial plans and monthly financial reports.