Photo: Ed Stannard / Hearst Connecticut Media
Mayoral candidate Justin Elicker’s disappointing approach to municipal economic development seems misguided, as he demands more from Yale to New Haven despite the $11.5 million or so already generously paid in lieu of taxes on noncommercial property and the millions of dollars of taxes paid appropriately on commercial property. Despite this uniquely generous, voluntary support, at a recent rally Elicker charged: “You can’t even see the $11.5 million. I think they should give $50 million a year to the city.” It is hard to explain how he selected this figure and to decipher his motives as a Yale alum perhaps eager to assert an independent image.
I was recently appointed by Gov. Ned Lamont to the board of the nonprofit Connecticut Economic Resource Center and have worked in economic development over the past 45 years. I have also been a Yale faculty member for 20 years where I created a nonprofit institute that has hosted 40 mayors a year for peer learning. But it is not any official institutional authority or partisan capacity that I write. Rather, as a leadership scholar, I am troubled by Elicker’s instincts to appeal to inflammatory, regressive and divisive political oratory.
Yale already pays more to New Haven then much-larger Harvard and much-larger MIT combined pay to Cambridge, Mass. New Haven received greater payments in lieu of taxes per capita than any city in the nation and even nominally twice that of Cambridge with mainly a single payer — Yale.
Yale pays property taxes on all its commercial space, and does not run commercial businesses in non-taxable property. Yale and New Haven have so transcended the classic town/gown conflicts, it is a shame to see someone exploiting any smoldering embers from those bad old days.
While the New Haven economy could do better, the city is hardly in distress. In fact, it led the state this past year. Yale has revived decrepit, abandoned venues in the center of town and attracted new tax-paying employers. Yale’s contribution to the local economy is almost $17 billion each year, it directly and indirectly generates 133,000 jobs, and over the past decade launched 130 companies based on ideas from Yale faculty or students.
Thanks in part to Yale, New Haven has enjoyed the largest surge of the nation’s millennial migration. Just last month, Bloomberg identified Connecticut as the nation’s fourth most innovative state after California, Massachusetts and Washington based on six metrics including patents and degrees.
A mayor’s approach should be to build on success and leverage the magnet of a great university, as Pittsburgh has done to attract new private sector employers, instead of parasitically attacking that resource. Adding tax burdens is absolutely the wrong path. Smart public officials are leveraging the strong educational, cultural resources as beacons of economic growth, not as a short-term feeding trough.
A 2017 Brookings Institute study found that the Pittsburgh region’s per capita university research and development spending was nearly 2.5 times the national average. This is with a lower state income tax than Connecticut, zero city sales tax and no payments in lieu of taxes. The study found that university-spawned advanced technology industry clusters generated 326,000 jobs, representing a third of the Pittsburgh region’s private sector employment.
Just last Tuesday afternoon I joined CERC chairs Jim Smith and Indra Nooyi addressing 20 college and university presidents, including Yale President Peter Salovey, all eager to help advance Connecticut’s growth through workforce development.
That evening I led a panel discussion of Yale officials, entrepreneurs and financiers that kicked off a Yale-sponsored forum focused on enhancing the growth of new industries in cutting-edge job-creating fields. The event also included Governor Lamont and his venture capitalist wife Annie, as well economic development commissioner David Lehman. It attracted 1,400 people with the resources to rocket Connecticut to an exciting new competitive future for all parts of the community. The spirit is fresh with tangible evidence of scores of thriving, fresh, New Haven-based enterprises and Yale spinouts such as the pioneering cancer fighter Arvinas and Quantum Circuits, the world’s leader in quantum computing.
Sadly, Elicker takes us backward to the divisive ideological chants of the 1930s or to the polarizing politics outside of Connecticut. Cynical exploitation of scapegoats and the finger-pointing vilification to divide constituents is the last thing this nation or this state needs.
Connecticut’s Mark Twain said, “If the world comes to an end, I want to be in Cincinnati since everything comes there 10 years late.” This was once echoed about Connecticut, but Elicker has to catch up on the change in his own backyard. The new narrative is that this is a gorgeous state and a historic, vibrant city with communities unifying to capture and lead the future.
Jeffrey A. Sonnenfeld is senior associate dean for leadership studies at the Lester Crown Professor of Leadership Practice at the Yale School of Management.
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