A Bruising Budget, Plus: Begging Joe McGee And CT Economic News

The mayor who promised a $600 tax cut when he was a candidate for office has decided to raise his taxes (and yours) $600. How prophetic. Ouch.

The nearly half-billion-dollar budget that Mayor Bill Finch unveiled, as noted previously here in posts and comments for weeks, isn’t pretty. Lots of layoffs, union concessions, library and health clinic cuts part of the picture just to keep the mil rate increase from going above four mils. The library system looks like it will take the biggest hit.

The mayor has placed blame on his predecessor John Fabrizi for passing an election-year budget loaded with one-shot revenues. Finch says the budget process was appalling for city bean counters because they had to untangle the mess of the Fabrizi budget. Finch didn’t tell you, of course, that the people that built Fabrizi’s final budget are the same people that built Finch’s first budget. The only appreciable addition to the process was Andy Nunn, Finch’s chief administrative officer.

City Council President Tom McCarthy told OIB this morning that he had not yet seen the final budget document but that he will be reviewing it before it’s officially presented to the council on Monday for referral to the budget committee.

“The council will do everything possible to limit the budget impact,” said McCarthy. “Everything’s on the table. We must get the most out of the least. We’ll go through every department. We will do everything we can to make sure the taxpayers pay the least.”

One of the big issues the city (and other towns) face, according to McCarthy, is coping with the fallout of predatory lending practices that has the potential to lead to thousands of loan defaults and the prospects of additional tax-revenue losses.

Will the council look at Finch’s sacred cows such as immediate staff and political hirings?

The final budget impact on the city’s school system is also an open question. There’s a movement in Hartford to try to secure funding for a full forensic audit of a budget that’s more than $200 million.

McGee’s Advice

Joe McGee, the volunteer advisor that Mayor Bill Finch selected to help redefine the city’ economic development office, knows a lot about big projects and big egos.

McGee was the vice president who supervised the construction of Bridgeport Center and with it the remarkable job of dealing with renowned architect Richard Meier whose religion of white stamped a distinctive look on the corporate headquarters of People’s Bank.

McGee, who also served as the top economic development official under former Connecticut Gov. Lowell Weicker, probably knows the infrastructure of downtown Bridgeport better than anyone on the planet. Putting up a modern building in an old city, in addition to working through the city’s archaic land-use approval process, will do that.

The vice president for The Business Council of Fairfield County co-chaired a committee that issued recommendations for growing the city’s tax base. Part of the problem, McGee pointed out, is lack of staff in a revenue-generating department. Hartford, for instance, has three times the economic development bodies of the state’s largest city.

The city has essentially operated for four months without a director of economic development. Finch wanted to revamp the department before bringing in his own person. Hopefully, the business-friendly recommendations of McGee and co-chair Reggie Walker, who formerly worked in the city’s development office, will poise the city in the right direction. Some of those recommendations include the hiring of a new urban design reviewer for land-use boards to provide adequate review of all applications, expediting building permits, increasing permit fees associated with major commercial construction and creating an Office of Neighborhood Development overseeing neighborhood planning.

Here’s my suggestion based on the research and reading I’ve done, which included several kiva reviews — beg the Business Council of Fairfield County to loan McGee to the city for a year, or two, or three (am I asking too much?), or pay McGee what he wants to stick around and see this stuff through. C’mon Joe, that commute from Fairfield to Stamford has got to be a drag! C’mon back to Bridgeport, Joe! Ah, wishful thinking.

News release from CT Secretary of the State

Connecticut Businesses Folding at Record Pace
Bysiewicz says: 1st quarter numbers indicate economic trouble for Connecticut
Hartford: On the same day Federal Reserve Chairman Ben Bernanke warned Congress that the economy may shrink over the first half of this year; Secretary of the State Susan Bysiewicz reported that Connecticut witnessed a record number of business stops – 2,752 – for the first quarter (January-March) of 2008. This figure represents the highest number of stops for the first quarter period since at least 2000. The March 2008 business stops represent the highest single month for 2008 at 1,107.

Connecticut’s economic future looks even cloudier when comparing economic quarters by year. For example, 2008 business starts for the 1st quarter are at their lowest level – 7,761 – since the 1st quarter of 2003 when it was 7,108. The March 2008 business starts are the lowest recorded for 2008 at 2,436.

“Connecticut businesses are clearly struggling to stay afloat as the national and state economy continues to see a major decline,” said Secretary Bysiewicz. “Small business owners and others continue to grapple with the costs of doing business given escalating energy prices, the credit crunch, and health care costs. Particularly during the last few weeks of the legislative session, we must do all we can to provide support to the business community to stem the tide. That is why I have been a strong advocate of repealing the business entity tax and opening up the state employee health care plan to small businesses.”

After a review of the Secretary’s report, Don Klepper-Smith, Chief Economist and Director of Research for DataCore Partners LLC of New Haven stated, “The data on starts suggests that the Connecticut economy is starting to feel the effects of a national recession, which probably began late last year. Business starts are an important gauge because they speak to not only business confidence, but job creation and investment as well. The severity of the national recession is clearly going to impact us through the remainder of the year. I expect further erosion in business starts, and a rise in business failures.”

According to Dr. Steven P. Lanza, Executive Editor of “The Connecticut Economy Quarterly”, Bysiewicz’s report indicates that, “The sharp drop in business starts, and the accompanying rise in business stops, is further evidence that the recession storm clouds gathering on the nation’s economic horizon stretch across Connecticut, too.

As the Chief Business Registrar for the State of Connecticut, Secretary Bysiewicz maintains a Small and Minority Business Services Unit through the Commercial Recording Division. The unit hosts several business development events throughout the year including two Business Showcases. To date the Showcases have helped more than 7,000 Connecticut businesses.