Democratic Policies push Hartford, Ct. to Bankruptcy
Connecticut’s capital city is on the brink of financial disaster. It’s been less than one year since Democratic Mayor Luke Bronin took office and already he is pleading with the state to save him from bankruptcy.
Bronin’s troubles are vast. The city suffers the effects of years of mismanagement including high taxes, exorbitant living costs, and rampant unemployment. Nearly one third of the city’s residents live in poverty. Unsurprisingly, Hartford was recently rated as the worst capital city in the nation.
Bronin testified before the state’s Finance, Revenue, and Bonding Committee this month to push a bill that would have established a “financial sustainability commission” for the flagging city. The commission, which would have had the power to act as final arbitrator during contract negotiations with disaffected unions, told the mayor to find his money in the city’s budget. The bill did not pass.
During his testimony, the desperate mayor explained that he has little wiggle room given Hartford’s dire financial circumstances. The new mayor faces a growing, $50 million gap on a $250 million non-education budget for 2017. The city’s crushing bonded-debt payments will also increase (after the questionable decision to build a baseball stadium) and Hartford’s retiree and pension healthcare costs are on the rise.
Previous mayors had delayed debt payments and utilized one-time revenue sources to get by, but these options no longer exist for Bronin. Even if he were to eradicate the city’s police and fire departments, he wouldn’t’ have enough money to close the gap.
After years of bad policies, the 18-square-mile city faces oppressive property taxes and the state’s highest mill rate. Cars and trucks are taxed at 70% of assessed value.
Mayor Bronin does not believe that increasing taxes on the city’s beleaguered population will help, but what other options does he have?
Bankruptcy is a grim but possible answer. The decision to seek protection under Chapter 9, however, is sure to create turmoil. Municipalities in Connecticut must have permission from the state governor to declare bankruptcy. History shows us that governors typically step in to deter such moves, such as 1988 when Governor William O’Neill crushed Bridgeport’s attempt to become the first municipality in the nation to declare bankruptcy.
The state may try to intervene if Mayor Bronin chooses this path, but Connecticut is not in a good financial position to provide assistance to its struggling capital. The state has not quite recovered from the 2008 recession and today has the highest bonded debt per capita of any state.
Meanwhile, Mayor Bronin is laying off city employees and asking city unions for millions of dollars in concessions. But Bronin can only do so much in a city in which the labor-backed Working Families Party is the principal alternative to the Dems. There are six Dems and three Working Family Party members on Hartford’s Court of Common Council. The power of Hartford’s unions explains in part why employee-compensation costs have gotten so out of hand.
Bronin, however, seems bound and determined to do whatever it takes to save the city of Hartford. We can only hope that his years of experience as a naval officer and attorney are enough to save Connecticut’s capital city.