New Haven officials are grappling with a proposed 4 percent tax increase as new data reveals that more than half of the city's real estate value remains tax-exempt. The city's 2025 Grand List shows a total net taxable value of over $9.25 billion, a modest increase from the previous year, but this figure is overshadowed by the $10.6 billion in property value that contributes nothing to the tax base.
Key Takeaways
- New Haven's proposed budget for Fiscal Year 2026-27 includes a 4% tax increase for residents and businesses.
- A staggering 56% of the city's total real estate value, amounting to over $10.6 billion, is classified as tax-exempt.
- Yale University and Yale New Haven Hospital collectively own 60% of the city's tax-exempt property, valued at a combined $6.25 billion.
- The city's taxable Grand List grew by 2.48% to $9.25 billion, providing some relief but not enough to offset rising costs.
- City leaders are expressing urgent concerns about the financial strain on taxpayers and are exploring new revenue streams.
A City Divided by Tax Status
During a Finance Committee meeting at City Hall, Acting City Assessor Alexzander Pullen presented the finalized 2025 Grand List, which serves as the foundation for the city's budget. The total value of taxable property—including real estate, personal property, and motor vehicles—reached $9,258,290,680.
This represents a 2.48% increase from the 2024 total of $9,034,084,421. While any growth is welcome, especially after last year's half-percent decline, the figures highlight a persistent challenge for the city. "This year’s 2.5 percent increase puts us in a much better situation," Pullen noted, attributing the growth to new construction permits, developments coming onto the tax rolls after deferral periods, and some nonprofits losing their exempt status.
By the Numbers
- Total Tax-Exempt Real Estate Value: $10,603,984,551
- Total Taxable Real Estate Value: $7,888,685,783
- Yale University's Exempt Property: $4.5 billion (43% of total exempt)
- Yale New Haven Hospital's Exempt Property: $1.75 billion (17% of total exempt)
The core issue remains that only 44% of New Haven's real estate is taxable. The remaining 56% is owned by non-profit entities, with Yale University and its affiliated hospital being the largest stakeholders. Yale University alone owns an estimated $4.5 billion in tax-exempt property, while Yale New Haven Hospital holds another $1.75 billion.
The Role of Yale University
Despite its vast non-taxable holdings, Yale University remains the city's second-largest taxpayer, behind United Illuminating, with taxable properties assessed at $146,192,992. This year, the university removed only two properties from the tax rolls, a house at 282 Prospect St. and a property at 53 Broadway, with a combined value of approximately $2.6 million.
This was described by Pullen as a "drop in the bucket" compared to previous years, such as the 2023 acquisition of the 300 George St. med-tech complex, which took over $56 million in assessed value off the tax rolls.
Understanding the City-Yale Agreement
A 2021 agreement between the city and Yale, recently extended for another six years, provides a transitional period for newly acquired properties. Under this deal, the university continues to make full tax-equivalent payments for three years on properties it makes tax-exempt. Following that, the payments gradually decrease over the next decade.
This arrangement provides a temporary buffer but does not change the long-term reality of a shrinking tax base relative to the city's overall property value.
Alders Push Back on Proposed Budget
The presentation of Mayor Justin Elicker's proposed $733.3 million general fund budget, which necessitates the 4% tax hike, was met with concern from city alders. They questioned the sustainability of relying on homeowners and local businesses to cover increasing city expenses.
Majority Leader and Westville/Amity Alder Richard Furlow voiced strong opposition to the trend of rising costs.
"This trend going up and up and up every year is extremely concerning to a city of majority blue-collar workers, who are struggling to pay and to manage. The majority of us are one paycheck away from being booted if things get out of control."
Furlow requested a detailed breakdown of the budget to distinguish between fixed legacy costs, such as debt and pensions, and new operational spending. "What’s in our control is new spending," he emphasized, signaling a desire to scrutinize any new positions or programs proposed in the budget.
City Budget Director Shannon McCue acknowledged the challenge. "It’s always that balancing act," she said. "How do you pay for the legacy costs from the debt and the pension, and how do you provide services that the city so needs?"
The Search for New Revenue
The debate has intensified the search for alternative revenue streams. Hill Alder Evelyn Rodriguez pointed to the city's financial and economic development teams, asking what more could be done to generate income beyond property taxes.
"What other funding can we use to increase revenue, considering where our city is?" Rodriguez asked. "We can’t continue on the pockets of the taxpayers."
McCue responded by highlighting ongoing efforts by the Economic Development department to attract new industries and housing projects. She also mentioned lobbying at the state level for increased funding, particularly for education, and continuous engagement with Yale for financial support.
However, the fundamental problem persists. As long as the majority of the city's land value is held by institutions that do not pay property taxes, the financial burden will fall disproportionately on a smaller base of residents and businesses. The upcoming budget deliberations are set to be a critical test of the city's ability to find a sustainable financial path forward without further straining its taxpayers.
