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.”
Walker’s address:
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.
GIVE ME A BREAK. The reason we have high property taxes in urban areas is because the State Legislature is controlled by the suburban legislators, both Democratic and Republican. Raise the income taxes and lower the property taxes and suburban residents will end their free ride.
And until that happens, and my prediction is Never, taking the expert advice of Dave Walker would be most prudent for this long-suffering city.
Frank Gyure is correct, but so is Jennifer Buchanan. That’s why I agree with her conclusion. +1 to Dave and Jennifer.
Frank? Income taxes are revenue for the state. Property taxes are revenue for cities. The urban areas you speak of already get a great deal of aid from the state while suburban areas get little to none. The state is already struggling to pay its bills with the money it gets. If cities like Bridgeport WANT to be hamstrung and at the beck and call of the state, this is a good idea. Kind of like living with your parents. If BPT wants to be a big boy and make the hard/smart choices, it needs to learn to live within its means. The state could use a lesson in this. Do not use Hartford as a role model.
Remember the next President of the United States Scott Walker, who brought destroying pensions and union contracts to Wisconsin, who was going to bring the same to all America with those policies? Something happened on his road to 1600 Pennsylvania Ave to reside, the Republican voters said no thanks, well here we go again with David Walker’s.
Don’t worry Frank, the suburbs got your back, Papa Entitlement will throw in the extra $20 million for the deficit on top of the Hundreds of Millions Bridgeport gets year in and year out. Let’s not forget the other cities in Connecticut, They’re Entitled Too!!!
I have lived in seven states and DC and have knowledge and experience across the country. Bridgeport and CT’s leaders need to face the facts and get to work. Past leaders at both levels of government have spent too much, over-promised on benefits, and under-delivered on growth. It’s not too late to turn things around but it will take strong leadership and very tough choices. Hopefully we will get both. If we don’t, everyone will suffer to differing degrees.
Dave Walker, on your post at 7:36am I’m in agreement and as for your editorial I look at that as a starting point for discussion, but not the final answer.
America believes in capitalism (free enterprise). What is capitalism, an economic and political system in which a country’s trade and industry are controlled by private owners for profit, rather than by the state. In America Capitalism has no loyalty to any city, state or America because their goal is the bottom line, making money for their stockholders and nothing else. These businesses have no problem in picking up and moving to another city, state or country thereby leaving workers and their families bone dry and in disarray to find a way to support their families.
United States foreign aid is given to other countries for military aid and economic aid. In 2013 America gave out $40.11 billion in foreign aid. The United States government got that money to help other countries from the taxes paid by residents from Bridgeport and from all others who must pay taxes but when times get hard the hard-working American now must give up what they worked so hard to get to take care of their family, which is the American way, work hard.
Ron, it’s not just the stockholders, it’s also people who don’t have pensions anymore, we now have 401K and 403B plans we pay a percentage of and the company matches or puts in a lower percentage. The majority of people in the private sector don’t have pensions and have to be in bed with Wall Street for their retirement.
Ron,
Check your figures. The U.S. gave Israel $30 billion alone. How much did Bridgeport get?
Dave Walker’s message is not a new one. Unfortunately, it is now critical that painful changes be made thanks to the Democrat party tax, spend and make promises approach.
Radical changes were needed in Wisconsin and government employee unions felt they should be exempt from sharing the pain. Will Connecticut continue on an unsustainable path?
At the municipal level the main source of revenue is property tax, a regressive tax that many mayors have argued is unfair in urban centers. The option at this point is to reduce spending. Easier said than done, I know, but I was part of a city council that did reduce spending. Is this current city council capable of doing so?
That could be a topic for another OIB posting.
What America doesn’t need is the Republican old and tired idea of getting rid of the capital gains tax, which is more private welfare for the rich.
And hence you deflect. Ron, capital gains tax is not a city revenue. That is a federal tax. So far the subject of how to pay the bills with the money you have has been deflected to the state income tax and federal capital gains tax. These are really ways to pay the bills with taxes that are not yours. As the state and federal government already can’t pay their own bills the chances of them paying BPT’s bills are low.
What Ron should have pointed out is the promises local government made to employees were totally doable if city government pensions, like social security, were not managed like a Ponzi scam. If city government made the contributions like they were supposed to, the pension money would be there to meet obligations.
Besides, there are many good reasons, ethical and financial, to do away with capital gains tax.
My point about capital gains tax is that is the main issue Republicans are concerned about and increasing the military budget to fight wars. Roads, bridges, water lines (Flint MI), the infrastructure all over America is falling apart but the U.S. Congress has no interest. Just like Mayor Ganim is asking the state for more money to help pass legislation to help Bridgeport and other cities in Connecticut is the same thing governors like Malloy do to get more funding for the state by asking congress for more financial aid the same way countries ask for foreign aid from America.
The thing you SHOULD be wondering about is what happened to the billions we were supposed to be spending on infrastructure. This decay did not happen yesterday but we have been spending money on infrastructure for decades. You think Malloy might have thought of this before he decided to spend a billion dollars on his busway fiasco? This new infrastructure emergency dilemma is just the most recent hype to spend more money. Don’t believe the hype. We will soon be swamped with more security hype, anti-mosquito Zika virus hype or a soon-to-be-announced hype. Spend more money on something that will not help for something that will not affect anyone.
As for capital gains, wait until you choose to sell your house and the government becomes a 1/3 partner. I know you need that money to live on in your retirement but the government needs it as well. After all, whose needs are more important? Yours or theirs? You bought the house, paid for it and kept it up but they need the money. It is only fair, you rich SOB. That is what you get for not living in an apartment like all us poor folk.
I see you have no problem with the American taxpayers bailing out Wall Street, the saving and loans corporations, big banks, tax cuts for the rich, to name just a few and where does the money come from to pay for all this? The hard-working taxpayer, you have Donald Trump getting rich by filing bankruptcy four times but once again you have no problem with the rich getting government welfare.
Fact-checking claims about Donald Trump’s four bankruptcies:
www .politifact.com/truth-o-meter/statements/2015/sep/21/carly-fiorina/trumps-four-bankruptcies/
See, you are wrong again. I would have let the banks go under. The ‘healthiest’ banks would have survived and been stronger for it. Kind of a financial Darwinism. The amount of short-term suffering would have been greater but we would have been better in the long term. As for Trump’s bankruptcy? He made the best business decision he could have made at the time. I do not blame the guy for playing the game inside the box that was set up for him. Besides, Obama spent just as much as Bush did for the economic bailout.
But you are deflecting again. This conversation has no bearing on BPT and how it will pay the bills. BPT needs money. That money comes from property taxes. BPT has only two choices: raise taxes or cut spending. It is not that much different than your household budget. Property taxes = paycheck. Bills = bills. Bills MUST be equal to or less than paycheck. As BPT is 16 square miles or 10,240 acres and BPT needs about $512 million, an acre must produce $50K/year in property tax. The city does get some revenue from fees, fines, etc. but that is not a lot. $50K/year an acre is one of, if not the highest in the state. Most of BPT’s money comes in the form of aid from the state. That is tax money our reviled suburban neighbors paid and we get to spend. No need to thank them. Oh, the governor just cut the car tax so more of that figure now needs to come from your house.
Once again you don’t want to recognize the fact federal tax dollars come from workers like those in Bridgeport and if America can give Israeli a military aid package for 2007 under President Bush. 10-year, $30 billion. Now Israel will not repay that money back but Bridgeport can’t get anything from the federal government? Please, give me a break.
That is a very clear and concise way to sum up Trump’s stance on foreign aid. I did not know you were a Trump supporter.
trailblazersblog.dallasnews.com/2016/03/trump-raises-possibility-of-curbing-israel-aid-calls-3d-party-talk-spiteful.html/
However there is no clear reason why anyone should give BPT or Israel anything. Let the taxpayers of BPT keep their money and BPT can just pay its own bills. I am all for that. All BPT has to do is learn to live within its means.
What Walker has been saying very directly for several years is the economic development (Grand List growth) must increase regularly and faster than the spending (operating budget) does.
That is simple data to present to the public if you believe in OPEN, ACCOUNTABLE, TRANSPARENT and HONEST governance. Post the GRAND LIST on the City web site with the many adjustments that eliminate taxes or lessen them to provide the NET TAXABLE GRAND LIST people talk about but do not see. The Operating budget is already public monthly, but also should be accessible by the public on the City site. After all, the Council members have been receiving these data reports electronically for some years. Why not the taxpayers?
Let’s see if G2 is serious about limiting growth in taxes. And see whether OPEN technology provides HONEST ACCOUNTABILITY in a TRANSPARENT manner. Time will tell.
Bridgeport has never laid out a vision of what it wants to be, much less how it gets there. We have allowed ourselves to become the development junkyard of the region, allowing all the region’s polluting, tax base eroding development to be dumped here for the convenience of the ‘burbs (even as we allowed ourselves to become the servant’s quarters to the region).
We will never redevelop into a self-sufficient, fiscally stable, desirable community until we come up with a big, bold, plan to recapture our glory. This won’t be accomplished through Bass Pro, Chipotle, or waterfront power plants. Nor by downtown juvenile jails or inappropriately located train stations.
We need a real vision and plan for development that is based on jobs and high-value tax base. In the meantime, we have to charge the region/state, and non-taxpayer, tax-consuming institutions (e.g., Sacred Heart University housing/services facilities) for Bridgeport-provided services, while we squeeze the state and feds for the money needed to maintain Bridgeport’s condition as regional service provider, power plant, and solid-waste dumping ground.
Enough BS from the state, feds, and region. Time to rebel! (And it’s a good year to do it!)
What is an example of a high-value tax base development? I cannot think of anything more high-value than a power plant. BPT should rebel. Do the state a favor and secede. That will show them.
While I think Dave’s open letter of a 10% reduction is draconian and roars Republican economics, the fact is as JML stated you have to either raise revenues or cut expenses. There need to be cuts made to city government and the bloated Board of Education needs some serious fat trimming as well. I would argue however there are other ways to raise revenue outside of increasing the grand list.
First and foremost is the broken PILOT system. How many State and Federal (aka non-taxpaying) properties are there in the city? How many internet certified reverends have started churches? How many parks do we really need (and have to maintain)? How much further expansion are we going to allow Sacred Heart and UB???
16 square miles of usable land, yet we have more churches, municipal buildings and churches than any comparably sized city. We need a multi-faceted approach that includes budget tightening as well as revenue growth.
You are right, PILOT and tax-free development is a problem in BPT and many cities. A simple solution would be these PILOT organizations and nonprofits pay the appropriate property tax and the state reimburses THEM. This way the state and the nonprofits can argue among themselves and the cities would no longer have to be the middlemen.
“What is an example of a high-value tax base development? I cannot think of anything more high-value than a power plant. BPT should rebel. Do the state a favor and secede. That will show them.”
The operative portion of the quote from the uninformed, semi-literate suburbanite who posted the above quote is, “… I cannot think …”
You see Bridgeporters, we spend tremendous amounts of time and energy attacking each other, City Hall, the Democratic Party, et al., and we fail to see all we are accomplishing is the suburban agenda of divide, isolate, and exploit stupid Bridgeport. Even anonymous, semiliterate morons, such as the above-quoted meathead, know we are ripe for the picking by the ‘burbs in our disunified state. Our Gold Coast overseers read our comments here and drool. They know as long as we are preoccupied with our own petty intra-city rivalries and internecine warfare, we will never be able to assert ourselves and reclaim our city and resources as our own and use such to ameliorate our socioeconomic decay.
Really, to think the ignorant, moronic “BOE SPYs” out there can gloat in the knowledge of their suburban advantage and insidiously resonate with our discord speaks to the bleak prospects of a Bridgeport renaissance.
I guess I must be illiterate because I missed your answer to the question in your diatribe. You do enjoy speaking metaphorically while breezing over concrete solutions. The only thing you have to do is provide an example of ‘a high-value tax base development.’ As UI is number 2 in the list of the top 10 city taxpayers, what developments would you suggest that would move them to 10?
Another question that arises. If I am a semi-literate suburbanite, how can I be so stupid and get so wealthy? Maybe I was just smart enough to move out of Bridgeport?
Okay Jeff, let me answer the question for you. BPT does not need some mythical high-value tax base development. BPT needs $50K an acre or more. Since building plots in BPT average 1/8 an acre, that is $6250 a plot or a land/house value of $212,000. ($6250/.7/.042198). In 2013 PSEG paid BPT $122,080,687. As long as all their facilities do not cover more than 2,442 acres (3.8 square miles or 23% of BPT) this is exactly what BPT needs. This example does not take into account the added burden of tax-free property. It is used to illustrate that the tax burden problem is just simple math. What do you have and how much does it need to produce? The other simple solution is to reduce the needs in the form of cutting the city budget.
BOE SPY: Power plants devalue surrounding land and displace higher-value development. If the devaluing effect were factored into the equation, the PSEG property would have a net negative value for Bridgeport. Ridiculous mathematical contrivances will not change the negative effects of power plants on Bridgeport’s development prerogatives/parameters. And you don’t explain your math, but that it is truly stupid is obvious. “In 2013 PSEG paid BPT $122,080,687. As long as all their facilities do not cover more than 2,442 acres (3.8 square miles or 23% of BPT) this is exactly what BPT needs.”
BOE SPY, you are truly obtuse. First off, the $122,080,687 is the tax assessment on PSEG, it is not what they pay in taxes. (You have to apply the MIL RATE to the assessed value of the property.) In any event, to suggest $122,080,687 is all a NYC-area seacoast city should be able to garner in taxes from 3.8 SQUARE MILES of land is just plain idiotic. Your commentary defines your marginal intellectual capacity and prejudiced, cynical, anti-urban point of view. (Indeed, the most intelligent aspect of your posts, in terms of your choices, is you have the good sense to remain anonymous, lest it be revealed just who is behind the idiotic posts.) If you’re wealthy, your wealth must have been inherited.
(Perhaps BOE SPY would suggest a PSEG behemoth power plant for Trumbull in Tashua next to their sewage processing plant as a means of adding value to their grand list by way of stabilizing their tax base. Yes, and Bridgeport could use a few more “mythical” People’s Bank buildings, as well as a few manufacturing facilities, perhaps to manufacture fuel cells, solar panels, large-capacity storage batteries, etc. 3.8 square miles could accommodate several billion dollars worth of such development.)
Jeff, the power plant covers about 58.8 acres at a valuation of $122,080,687. That is ~$2 million per acre. The power plant does not cover 3.8 square miles. That is the value it pays when compared to what BPT needs. To make the city budget need with 16 acres, an acre has to be valued at ~$1.2 mil.
You mention Bridgeport Center completed in 1989. Exactly what has sprouted up near there since 1989? Be real, that building is the newest building within a mile. Finch did rehab some of the old buildings into apartments. That is 4.16 acres with an assessment of $53 mil or $12.7 mil per acre. You would have to consider People’s is in prime downtown and the power plant is built on a swampy marsh. It would also seem a large number of other industrial buildings are near the power plant.
Do you know what the fuel cell pays per acre? You still have not named any high-value development. You have simple named what BPT already has. I do not see People’s bank building another corporate headquarters in BPT. People’s bank owns a number of properties in BPT, the 850 Main Street building is a good one. Too bad about the derelict office building down the street near the library. That would be a far better choice for redevelopment than the power plant. We will see how Joe does, but good luck.
I am more than happy to explain math to you. What part do you not get?
Are you hungry and need a Snickers, Jeff? Or just a hug?
Both, Jennifer. Maybe a bear hug and an bag of Snickers!
BOE SPY. Your last post indicates you are hallucinating. I cannot even bring myself to further reply to your incoherent nonsense. (If anyone knows the ID of this guy, I would urge you to check on his well-being. He may be wandering around unable to effectively communicate or find his way home.)