The mil rate in Bridgeport is 54. In Hartford it’s 74–ouch–by far the highest in the state. Mayor Joe Ganim’s spending plan approved by the City Council calls for $4 million in union concessions to balance the budget, some of which he has achieved. Hartford Mayor Luke Bronin’s budget anticipates $15.5 million in municipal givebacks. Two months into the budget year he’s still waiting. Looking into next year Hartford bean counters are staring at a $30 million deficit. Is bankruptcy protection an option for Hartford?
In lieu of that, Bronin’s lobbying local and state leaders to embrace a regional approach to governing with shared services to cut costs. The 2017 session of the General Assembly could be a doozy dilemma of addressing bleeding cities.
The Hartford Courant’s Dan Haar chronicles the Hartford case in a story featuring Bronin here.
If the city can’t cut any further, after dozens of layoffs, and if it can’t raise taxes because its tax rate is already by far the highest in Connecticut and further increases will only mean more exodus, then it needs outside help. And if that fails, bankruptcy reorganization looms.
“This year the city of Hartford draws down essentially all of its reserves, all of its fund balance and we are depending on some significant savings from labor negotiations as well,” Bronin said. “We’re not afraid of making hard decisions but the structure is broken.”
A broken structure–translation: it must be reorganized–is another way of saying the city faces repeated shortfalls and deficits even when everything goes as planned. How big is the so-called structural deficit? Just to get through the fiscal year that started July 1, the city is counting on $15.5 million of givebacks from municipal unions–and that’s not forthcoming, two months into the year.
In June of 1991, facing reelection in November, Republican Mayor Mary Moran filed for municipal bankruptcy protection in federal court about three years after Democratic Mayor Tom Bucci announced the city was broke and needed a state bailout. The state allowed the city to use its bonding powers to borrow $55 million to retire an accumulated deficit. The state stuck the city with a financial review board whose mission was to ensure city budgets were in balance. Moran, frustrated in her dealings with the review board, announced the city had severe structural problems that required bankruptcy protection.
The state, led by Governor Lowell Weicker and Attorney General Dick Blumenthal, opposed the bankruptcy filing, arguing that as a child of the state the bankruptcy filing hurt the state’s credit worthiness. A federal judge ruled against the city, Moran appealed it and was defeated by Joe Ganim in the general election.
Kid, Weicker told 32-year-old Ganim, you help me, withdraw the bankruptcy filing, and I’ll help you. Within the next year or so the state bought Beardsley Zoo for $5 million, Beardsley Park for $5 million, more than $10 million came from a gaming compact Weicker cut with the Mashantucket Pequots, operators of Foxwoods. Weicker, the benevolent dictator, did things for the city through the force of will. He relocated Housatonic Community College, languishing on the East Side to Downtown, ordered the relocation of Troop G State Police Barracks from Westport to Bridgeport during a time of record-breaking crime. Another $500,000 from the state arrived to remove a hulking pile of illegal demolition debris in the East End dubbed “Mount Trashmore.”
Weicker showed that a governor can do things administratively to resurrect city finances. Taxes did not increase for 10 years and the review board disbanded in the summer of 1995. But are structural issues within cities so deep now–land poor and population rich, debt burden and other issues–they require a whole new rescue approach by the governor and state legislature? The state has its own financial issues.
Or are municipal bankruptcies on the horizon?
State Rep. Steve Stafstrom weighs in via Facebook comment:
It doesn’t matter who is worse off. The problem is the 21st Century economy requires dynamic, livable, walkable cities that are centers of innovation and economic growth. But for far too long CT has ignored its cities as economic drivers and centers for job growth, particularly its largest city, Bridgeport, and its Capitol City. We fundamentally need to reform our regressive property tax structure, help our urban cores address their unfunded legacy costs and prioritize infrastructure investments in our cities and along mass transit corridors to maximize economic growth. And we have to do so now.