Mayor Elicker: The city's "financial situation is on stronger footing than it has been in many, many years." Increased state aid, building permit revenue, and savings due to staff vacancies helped the city end last fiscal year with a $16 million budget surplus — a portion of which the mayor now plans to direct towards New Haven’s public schools.Mayor Justin Elicker announced that news Thursday morning at a City Hall press conference with Budget Director Shannon McCue and New Haven Public Schools (NHPS) Supt. Madeline Negrón. Together, they announced the general fund surplus of $16.4 million for Fiscal Year 2023 – 24 (FY24), which began July 1, 2023 and ended June 30. Generally, Elicker explained on Thursday, the city’s budget team spends a few months after the fiscal year ends ​“closing the books” and reviewing numbers and getting an idea of how the city finished the year. That process ended Sept. 30.Separately from the $16 million general fund surplus, there were also smaller surpluses in the workers’ compensation fund and the medical fund. Last year’s general fund budget was $662.7 million, while the FY25 budget — which took effect July 1 — is $679 million. For a breakdown of this fiscal year’s budget, click here.The FY24 surplus comes as NHPS attempts to cut costs while operating in a $2 million budget deficit, a fiscal hole that has led the district to reduce operations and consider staff layoffs.Elicker said on Thursday that he plans to propose that $3 million of the $16 million surplus be put toward the NHPS operating budget, in order to avoid any potential layoffs and support other expenses. He wants the rest of the FY24 surplus funds to go toward the city’s rainy day fund, which, after the surplus, has a balance of a little over $50 million.Also leftover from last year’s budget is $5.5 million in federal American Rescue Plan Act (ARPA) funds that the city anticipated using to close the budget. That money went unspent, and the mayor is proposing that the $5.5 million go toward school building maintenance. (Read a recent update about the status of the $115 million the city received in 2021 ARPA funds here.)Since the start of the school year, teachers and custodial staff across the district — but especially at Wilbur Cross, New Haven’s largest high school — have highlighted the disrepair of their buildings. Between dirty vents, water-damaged tiles, leaky ceilings, and a Cross library closed for weeks due to mold, staff and students have called on the district to do better. The superintendent and operations consultant Michael Carter recently blamed understaffing and aging buildings, while custodial union President Tom Delucia has blamed privatization of maintenance services. “The city is doing our part,” Elicker said. ​“We will continue to do more, but we are doing our part to help support New Haven Public School children.” In the past five years of his administration, he emphasized, the city has increased the city’s portion of the school budget by 48 percent. He called on the state and Gov. Ned Lamont to do more, particularly by loosening the state’s fiscal guardrails.The final say of where these funds go ultimately belongs to the Board of Alders. The city will submit a proposal that the alders will vote whether or not to approve. “It is a happy day for New Haven Public Schools,” Negrón said. ​“And it’s going to be an even happier day once the mayor’s proposal goes in the hands of the Board of Alders, and I’m confident that the Board of Alders will be approving the recommendation.” And why exactly did the city see such a budget surplus for FY24? The biggest driver of the increase in local revenues was an additional $5.4 million in the state’s payment in lieu of taxes (PILOT) to the city. Elicker thanked State Senate President Pro Tem Martin Looney and New Haven’s delegation for their work to increase those payments, which Elicker said has been ​“unbelievably helpful with our ability to close a lot of our budget gaps and help ensure that we are on much more stable fiscal footing.”The second main driver was an increase of $2.9 million in building permit revenue — the result of ​“new things being built” and a growing city. As for a decrease in expenses, there were two main savings: vacancy savings and expenditure controls. “It’s not any secret that across the nation it’s much harder to recruit people right now, and we’ve seen a reduction in staffing over these past three or four years, and that has led to some savings,” Elicker said. Regarding expenditure controls, Elicker said the budget office has implemented controls to make sure department heads are running ​“very tight budgets.” A more thorough report will be published to the city’s website soon.“The City of New Haven’s financial situation is on stronger footing than it has been in many, many years, and we have a lot more work to do,” the mayor said. To continue moving in the right direction, Elicker emphasized financial transparency, capping the city’s borrowing to $30 million per year, putting money into pension funds, and fueling economic growth. McCue, who replaced former Budget Director Michael Gormany in July, said that the city is seeing a gradual increase in taxable values, and that that will continue to rise as development continues. “This is the fourth straight year that we have seen a budget surplus,” Elicker said. But there are still $2.5 billion in unfunded liabilities — unfunded pensions, $700 million in debt, and healthcare payments for retirees that also amount to around $700 million, he said. With staffing costs going up, a possible new police contract, and the financial strain on NHPS, Elicker said, ​“I’m quite confident we’ll be facing yet another challenging budget season. … We’re making sure we spend every dollar carefully.”