WNPR

New Haven Faces Uncertainty Over Budget Deficit

Apr 2, 2018

New Haven’s proposed city budget is being criticized by an independent commission. According to the city, they’re looking to close a $14.4 million deficit to keep the budget in balance for the next fiscal year. But the Financial Review & Audit Commission, an independent body appointed by the mayor, says they’re way off.

The commission believes the deficit is more likely between $34 million and $55 million.

City spokesman Laurence Grotheer says the two major issues driving the deficit are health insurance for current and retired city employees, and pension funds.

But he points out that this is just step one in the process. He told Connecticut Public Radio the mayor and her finance team are working to stabilize those costs.

“These are the major drivers of the city’s overall budget," he said. "Continuing progress on these fronts, continuing predictability on the revenue side of the budget and a productive partnership with the city’s board of alders will lead to the responsible budget commission members envision.”

Grotheer said there will be public hearings, workshops, and committee meetings to work out these issues.

But the Financial Review and Audit Commission sees things slightly different. Mohit Agrawal is one of the commissioners.

He agrees medical coverage is the biggest concern in the proposed budget. But he said the other immediate concern is that, city leadership is overestimating revenues from other sources, such as the state and Yale University.

Agrawal said the city’s already running a lean operation and $50 million spending cuts are unlikely. And so if the deficit ends up being at the upper end of their estimate, that raises concerns over New Haven’s solvency.

"So either there are going to be major tax increases or the state’s going to get more involved and that’s going to involve the same kind of steps that Hartford took starting two or three years ago," he said.

Agrawal said the plan is for the city to pass a budget by May 29, before the start of the new fiscal year in July.