Bridgeport resident David Walker, the former U.S. comptroller general, addressed the City Council Monday night with a sobering declaration: “You need to make sure that the total City budget is cut by at least 10% from last year’s levels, and quit approving unreasonable long-term tax abatement deals that only serve to make the situation worse.”
As a Senior Strategic Advisor for PwC, and one of the nation’s leading government transformation, fiscal reform, and retirement security experts, I can tell you with certainty that both Connecticut and Bridgeport face major financial and fiscal challenges that require serious structural reforms. Mayor Ganim will present his proposed annual budget very soon. That budget needs to include dramatic spending reductions and other proposed reforms, and this Council needs to make sure that it does.
Let me provide a few facts to support why I believe that dramatic spending cuts and financial restructuring reforms are essential at this point in the City’s history.
Bridgeport already has among the highest property tax burdens in the country. High property taxes serve to reduce property values and reduce the attractiveness of Bridgeport as a place to live and do business. High property taxes can also force seniors and others living on fixed incomes out of their homes.
As a result, good governance demands that the Mayor and City Council work together to grow the tax base faster than the City Budget. If this does not happen, aggregate tax burdens will increase indefinitely.
The prior Mayor and the City Councils over the past 8 years have failed this basic good governance test. According to City Finance Director Flatto, the recent revaluation results disclosed that the City’s taxable grand list has declined 15% since 2008. This is much worse than the average for other municipalities in the state and around the nation.
At the same time, during the period 2007-2015, the City budget and aggregate property tax burdens have grown much faster than inflation and the overall economy.
As an example, property taxes on our home have already gone up about 40% exclusive of home improvements, since 2008. This is four times the aggregate 10% inflation rate over the same period!
The truth is that even if the new budget is held flat, property taxes will go up for anyone whose individual property assessment went down less than 15%.
For example, the assessment on our home went down 5%. Therefore, even with a flat budget, our property taxes would go up another 10%. This is patently unreasonable and totally unacceptable, especially given past property tax increases and since inflation was less than 1% during 2015.
Unfortunately, the situation is set to get worse in the future absent serious structural reforms. For example, Bridgeport currently has over $1 billion in unreasonable, unaffordable and unfunded retiree health care promises that must be restructured.
Both Connecticut and Bridgeport are in poor and deteriorating financial condition. The time has come to recognize reality. You need to make sure that the total City budget is cut by at least 10% from last year’s levels, and quit approving unreasonable long-term tax abatement deals that only serve to make the situation worse.
The future of this City depends on both the Mayor and the City Council doing much more to cut current spending, constrain future spending, restructure retirement plans, and promote responsible economic development that will help to grow the tax base faster than the City budget.
You should not underestimate the degree of taxpayer resistance and discontent that you will receive from me and others if you try to raise anyone’s taxes again. The time for tough choices and sound fiscal management practices is now. If the Mayor and City Council can’t get the job done, the state should create a Financial Control Board to do what is necessary to restore fiscal responsibility, and try to avoid bankruptcy.