Mayor Justin Elicker’s emphasis on debt reduction has brought consecutive budget surpluses and a higher bond rating, but raised concerns about public schools’ funding.
Zachary Suri & Ethan Wolin
10:39 pm, Oct 20, 2024
Staff Reporters
Daniel Zhao, Senior Photographer
Earlier this month, Fitch Ratings upgraded New Haven’s bond rating from BBB+ to A-, citing a “stable” fiscal policy amenable to investment. The higher bond rating — one of Mayor Justin Elicker’s major policy objectives — will allow the city to borrow funds at lower interest rates.
In interviews with the News, Elicker emphasized the importance of fiscal caution to address decades of debt-financed projects whose interest payments continue to place significant financial strain on the city’s budget.
His focus on the city’s long-term financial health, however, comes with trade-offs, including for New Haven Public Schools. Local and state leaders who spoke with the News praised Elicker’s leadership on education funding but raised questions about fiscal decisions at City Hall and New Haven Public Schools.
After the city closed last fiscal year’s budget, including $22 million in surplus and unspent pandemic-era federal money, Elicker proposed last month that $8.5 million be invested in New Haven Public Schools, whose deteriorating facilities have raised concerns this fall. Under his proposal, the remaining $13 million would go into the rainy day fund.
According to the mayor’s office, Fitch cited the city’s long-term investment in its rainy day fund as a key factor in the decision to upgrade New Haven’s bond rating. In 2019, the city put 2.8 percent of its budget into the rainy-day fund, a fraction of the 8 percent set aside last fiscal year.
The city’s repeated budget surpluses reflect a dramatic reversal from the city’s tough financial position when Elicker took office five years ago. The strengthening of the city’s finances has been aided by federal pandemic relief and an increase in property values, said David Schleicher, a Yale Law School professor who studies municipal law.
“Fitch’s bond rating increase is another important validator of our collective stewardship of the city’s finances, the budget reforms we’ve put into place, and the overall progress we’re making as a city to strengthen both our short-term and long-term financial health,” Elicker said in a press release.
While the city’s contribution to the New Haven public school system has steadily increased since Elicker took office — increasing by $8 million in 2022 and $5 million in 2023 — the New Haven Board of Education was forced to approve a provisional budget for New Haven Public Schools in June that relied on a $2.3 million deficit to support basic services.
Facing a budget crunch, New Haven Public Schools reorganized staff to fill critical positions without hiring for vacant ones, and many critical maintenance issues at New Haven Public Schools facilities have gone unaddressed.
Leslie Blatteau ’97 GRD ’07, president of the New Haven Federation of Teachers, praised the mayor’s attention to education funding but questioned why the city repeatedly runs a budget surplus when critical services remain underfunded.
Elicker said the four consecutive years of city budget surpluses have resulted from various unexpected savings, including the large number of vacant municipal jobs and revenue boosts from an expanding tax base.
At a demonstration last month, local leaders, including Elicker and Blatteau, blamed the state and federal government for failing to fill the gaps in the New Haven Public Schools budget left by expiring federal funds.
Elicker also blamed the current pinch on past mayors’ excessive borrowing.
“My role is to strike the right balance between getting our city on stable financial footing, so that in the long run we have more funding to spend on the things that we really care about, and ensuring that we’re addressing the problems of today,” Elicker said.
State Sen. Martin Looney blamed the acute maintenance issues the New Haven public school system faces on decades of fiscal mismanagement, not state underfunding. Looney holds the Board of Education primarily responsible for failing to save for basic maintenance on capital projects funded by the state.
Blatteau echoed Looney’s criticism of the district’s facilities management. “We do not have a clear vision for how we are preparing and maintaining our schools right now,” she said.
“The problem is not mismanagement and inefficiencies. The problem is a lack of funding,” Elicker told the News. “It’s quite clear that we are doing our part, and we need to see the state and federal government provide longer-term, reliable funding to New Haven Public Schools.”
Elicker believes he is striking the right balance, but Connecticut is not. Connecticut adheres to strict fiscal guardrails that have generated massive savings for the state while requiring cities to raise taxes for government services that residents expect.
In recent decades, the state has faced fiscal challenges similar to the city. Less than 10 years ago, Connecticut faced expanding pension debt obligations. The unusually aggressive fiscal guardrails that the state adopted in 2015 — and Elicker wants to see loosened — are responsible for much of the progress made in recent years in addressing the state’s pension debt crisis, according to Schleicher.
As revenues have increased with statewide economic growth, Schleicher said, state fiscal guardrails have been critical in shoring up the state’s long-term fiscal position. Elicker wants New Haven to do the same — reduce debt through controlled spending — even as he also wants the state to spend more.
Justin Elicker took office as mayor in 2020.
Zachary Suri is a staff reporter covering New Haven City Hall and Education & Youth Services. He previously served as associate beat reporter for state politics. Originally from Austin, TX, he is a sophomore in Morse College majoring in history.
Ethan Wolin covers City Hall and local politics. He is a sophomore in Silliman College from Washington, D.C.