NEW HAVEN, CT — New Haven ended its 2025-26 fiscal year with an $8.5 million budget deficit, Mayor Justin Elicker said Thursday at a City Hall press conference. The deficit breaks from surpluses the city posted in recent years, with most of the shortfall tied to Board of Education costs.
"This past year was a tough year," Elicker said, according to the New Haven Independent.
He spoke alongside Acting Budget Director Ron Gizzi. The fiscal year ran from July 1, 2025, through June 30, 2026. The $8.5 million total combines a $1.1 million surplus on the city side with a $9.6 million deficit in the public schools.
Busing and Staffing Drove the Shortfall
School bus transportation ran $10.5 million over budget. School district staff costs were $3.5 million over, city IT costs $2.7 million over and city utility costs $1.6 million over. Health insurance and liability insurance came in $3.6 million and $2.1 million over.
Vacancy savings, tax revenue a little above projections and extra state money offset part of the gap. The city had projected a $14 million deficit in June, Gizzi said, but tax collections and prescription rebates brought the figure down to $8.5 million.
Schools Superintendent Madeline Negrón told the Independent that staffing, special education tuition, and regular and specialized transportation drove the district's deficit. She said the district put $30 million in revenue from outside the general fund toward eligible expenses, which eased pressure on the operating budget.
The City Will Draw on Its Rainy Day Fund
To cover the shortfall, Elicker said, the city will use its rainy day fund. Over the past six years the fund went from a $10.6 million deficit to a balance of $55.6 million, he said. After this year's deficit it will fall to $47.1 million.
"The good news is our fund balance is in a really good place," the mayor said. He pointed to larger payments from the state and Yale, a growing tax base, the limit the city sets on its borrowing every two years and much bigger payments into its pension funds.