Dear Neighbors, 

I wanted to share with you some good news about the city budget.
 
First is the City of New Haven is officially reporting a budget surplus of approximately $16.9 million for Fiscal Year 2021-22, which ended on June 30^th.
 
And second the City of New Haven’s bond rating was recently upgraded to “BBB+” by Fitch Ratings, one of the top independent credit ratings agencies that evaluate municipalities and other organization’s financial health.
 
This is great news for city residents – and, taken together, clear indications that the hard work and hard choices we’ve made together to get the city’s budget back on the right track are beginning to bear fruit.
 
As you’ll recall, if we rewind the clock back to March 2020, when we first proposed the FY 2021-22 budget, the City was potentially headed towards a very different outcome. The City was facing a deep financial crisis unlike we had seen in decades and was staring down the barrel of a $66 million budget deficit – which, absent a radical change in city revenues and a new approach to city budgeting – would have been disastrous for our residents and city, resulting in deep, painful cuts to essential city services.  
 
Together, working with Board of Alders and New Haven’s state delegation, we fought hard to secure additional funding from the State of Connecticut, doubling our annual PILOT (Payment In-Lieu of Taxes) funding from $41 million to $91 million annually, and from Yale University, nearing doubling its annual voluntary contribution from $13 million to $23 million annually, for a net annual increase of approximately $60 million to the City’s budget.
 
These increased revenues along with other positive revenue streams in FY 2021-22 that indicate a growing local economy – including increased building permits, property sales, residents paying “back taxes,” and other savings – have resulted in the past year’s surplus.
 
The $16.9 million surplus, when added to the City’s existing fund balance of approximately $20 million, will provide the City with a Rainy Day fund of approximately $37 million. While best budgeting practices suggest governments have a fund balance of at least two months of their annual budget in reserves – which would amount to just over $100 million for the City of New Haven – this still represents real progress. In addition, with growing concerns of a slowing economy and the prospect of a recession on the horizon, this will enable the City to better weather coming financial storms so that the City can continue to meet its financial obligations and provide essential city services and programs.
 
To be clear: we still have a long way to go in order to right New Haven’s financial ship and to address the long-term, structural budget challenges that were passed down over the years – namely our underfunded pensions and debt costs, which are significant and not going away anytime soon. That said, we are now in a position for the first time to put our City on sounder long-term financial footing, to begin to chip away at our systemic budget issues, and, ultimately, to help ensure New Haven is a city where all can thrive.
 
For more information about this announcement and the City budget, check out the links below!
 
Always Serving You,

P.S. For more information about this announcement, you can:

• Watch the recent press conference here.
• Learn more about it in the news here or here.
• Review the City’s FY 21-22 Pre-Audit Report here or read
• Fitch Ratings recent announcement on our upgraded bond rating here.