Mayor: $17M Budget Surplus, Boosted Credit Rating 'Really Good News'

NEW HAVEN, CT —In March 2021, New Haven Mayor Justin Elicker said, the city was facing more than a $60 million deficit between revenues and expenses.

"Because of extreme financial challenges at the time, we were forced with a choice: increase taxes (to 7.75 percent) and make cuts or get help from partners," he said.

The city went the latter route.

In a media briefing on his budget update Wednesday at City Hall, said that the "help" from Yale University and the state resulted in a $16.9 million surplus.

As reported in 2021, the city saw a "significant increase" from $13 million to $23 million from Yale University.

As reported by Patch in November 2021, Yale increased its voluntary payments from $13 million annually by adding $10 million for each of the next five years and $2 million in the sixth year.

The total $52 million is in addition to the current annual payments that include the annual fire services payment calculated based on the 1990 agreement, voluntary payments based on the 2005 letter and indexed at 2.5%, and additional voluntary payments provided to the City annually starting in 2019.

And via the Tiered Payment in Lieu of Taxes program or PILOT program, the state increased its funding for New Haven from an earmarked roughly $41 million to $90 million in 2021.

Elicker pointed to other positive financial news, mostly from increased revenue from sources like property and motor vehicle owners paying back taxes to the tune of $7 million. And he said, based on the efforts of the department, building, and inspection permit revenue increased by $1.6 million.

But also from what is not the best of times for existing workers who need to carry the weight, but decreased salary costs due to scores of job vacancies. Elicker said the city is $3.5 million under budget on salaries, though there are more than 200 job vacancies.

Elicker also praised New Haven Public Schools and the Board of Education for its work in a "very, very challenging year" to remain on budget.

"Good news" but ...

Elicker said that the near $17 million surplus and other gains are "good news." But quickly added that, "We have a lot more work to do. We have a long way to go."

Elicker said that the "overall strategy" has been to "address systemic budget challenges" including underfunded pensions to the tune of $866 million, $625 million in outstanding bond debt, and retirement healthcare costs of $829 million.

"We've come a long way. We've made a lot of progress, the surplus shows, but the big picture is our city is still very much struggling and will have a tough road ahead," Elicker said.

He added that to the inevitable question what is the plan for the $16.9 million surplus, he said that it will be added to the city's current $20 million "rainy day fund."

"It will be a buffer as we head into a likely recession."

Watch the full media briefing here:

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