Former Mayor Mary Moran Asserts She Was Right To Place City Into Bankruptcy

In June of 1991 Republican Mayor Mary Moran sent Connecticut’s largest city into federal bankruptcy court. The move sent a shockwave across the state, caused Governor Lowell Weicker and Attorney General Richard Blumenthal to move against it and provoked Wall Street to suspend the city’s credit worthiness that handcuffed the city from making municipal improvements.

State leaders argued Bridgeport as a child of the state required authorization to pursue such a decision because it impacted the state’s credit rating. Moran argued it was the only way to provide relief from burdensome union contracts and a heavy debt burden. In the end a federal bankruptcy judge ruled against the city saying the city was not insolvent. Moran was defeated by Democrat Joe Ganim in November of 1991 that led to historic state support and eventually 10 straight years without a tax increase.

But Moran argues in a commentary she wrote for the Connecticut Post that the decision was correct and ahead of its time, especially in light of so many municipalities examining bankruptcy. See her essay below:

As many local governments face steep budget deficits and struggle to pay off debt that has accumulated for years, many cities across the nation are considering bankruptcy as their only recourse. For years, politicians in both political parties have made commitments to organized labor and special interests that while in the short term might have guaranteed electoral success, have in the long term created a financial condition in our country that is simply unsustainable.

As a new generation of leaders attempts to correct the sins of the past, I am reminded of my tenure as mayor of the city of Bridgeport, and how even in 1989, there was a resistance and a reluctance to confront our problems head on in the form of long-term structural reform.

Stockton, Calif., became the largest U.S. city to file for bankruptcy in June of this year and San Bernardino, Calif., was the most recent city to approve the same filing by their city council. In Omaha, Neb., eight of their districts have filed bankruptcy since 2010. Also, Central Fall, R.I., and Jefferson County, Ala., both filed for bankruptcy in 2011. In Michigan, seven local governments are under emergency managers who take control of cities on the brink of bankruptcy.

I often wonder if former Connecticut Gov. Lowell Weicker reads and observes the same news accounts that are covering the stories about those American cities that are facing financial collapse. I recall a meeting I had with Gov. Weicker in his Capitol office in 1990. My staff and I were pleading for state assistance. During the course of this meeting, we discussed the option of Chapter IX bankruptcy for the city of Bridgeport.

I will never forget Gov. Weicker pointing his finger in my face and telling me that I would raise taxes 18 percent.

When I reiterated that was not the answer and that I refused to allow our taxpayers to again be the scapegoats to solve this perpetual problem, Gov. Weicker asked us to leave his office.

This was the same governor who gave us the state income tax shortly after he was elected in 1990. Gov. Weicker told us that this would ensure that the state would be free and clear of structural deficits in the future. Today, state government is bigger than ever and we are hitting our residents with the highest tax increases in our state’s history. Just as Gov. Weicker wanted me to raise taxes 18 percent in Bridgeport and just as he imposed the state income tax on Connecticut residents, he did not understand then and likely does not understand now that the only relief that taxpayers will realize is in the form of structural reform to the levels of debt that states and municipalities incur, long-term reform of employee benefits and pensions, and leaders willing to make the tough decisions, even if they are politically unpopular.

I would argue that the problems that Bridgeport saw in 1989 are the same problems that many other cities are seeing today–and 23 years later, the financial condition of Bridgeport is even worse than when I left office in 1991.

Today, as it was in 1991 when I met with Gov. Weicker, there is no discussion in Hartford about amending or eliminating unfunded mandates that cost Bridgeport and other cities millions of dollars each year.

No one in public service has the temerity to talk about restructuring debt that can partially be blamed on egregious contracts that were negotiated at a time during which our political leaders never contemplated or considered the financial challenges our state and nation would be facing today.

In 1991, the then-newly appointed State Financial Review Board knew that Bridgeport was in bad shape, but no one wanted to step up and admit it. The Bridgeport Regional Business Council took a hands-off approach and hoped the problems would go away. Looking at Bridgeport’s financial condition today, I wonder if members of this financial review board now regret their inaction and their negative approach to the bold actions I recommended be taken during my term as mayor. The union contracts that I believed caused much of Bridgeport’s financial problems were all negotiated and approved before I took office as mayor.

My predecessor Thomas Bucci’s declaration of insolvency in 1989 and the resultant $60 million state-secured loan approved for Bridgeport gave birth to the financial review board.

Looking at Bridgeport’s condition today, it would appear from recent national feedback that the Chapter IX approaches in various cities throughout our country are being hailed as a positive, not a negative. Let’s rewind back to 22 years ago in the city of Bridgeport.

The media, the business community, political leaders and even the general public did not view the Chapter IX action and our attempt to restructure the city’s debt as a positive.

Instead, they vilified it as a negative. Are these attempts finally receiving some respect from those who fanned the “fires of doom”?

Bridgeport’s 1991 declaration to seek bankruptcy protection totally embarrassed the political establishment in Bridgeport and in Hartford. All of the politicians knew for years that Bridgeport was on the brink of financial collapse, but not one political leader would admit that bad judgement was allowed to fester and magnify for years. I decided that the financial well-being of the city outweighed my own political future.

I knew it was time to tell the truth about the city’s financial outlook and stopping the “bad judgment” runaway train; the city of my birth could no longer survive the temporary fixes.

As a journalist at the time stated, “We all knew the termites were there in the front porch, but did nothing about it until our feet went through the floor.”

Our feet went through the floor in 1991 when the city contemplated Chapter IX and the city will undoubtedly have another day of reckoning in the future.

One of my very trusted and hard-working employees who worked by my side during that difficult period, Sarah Burns, has recently published a well-researched documentary about the challenges we faced between 1989-91 as we contemplated filing Chap. IX. The book’s title is “The Drowning of a Seaside City–Bridgeport’s Ride to Bankruptcy.” I encourage everyone to give it a read. I do not for one moment regret my sincere attempts to breathe new life into this very deserving sleeping giant, Bridgeport. May God continue to bless Bridgeport, its leaders, all those who live and work there, and our great country, the United States of America.