http://cptv.vo.llnwd.net/o2/ypmwebcontent/Jeff%20Cohen/2012_02_14_JC%20120214%20City%20Budget.mp3
In April, Hartford Mayor Pedro Segarra will present next year's budget to city council. As WNPR's Jeff Cohen reports, he's got a pretty big hole to fill between now and then.
The city's current budget is about $547 million, and it's running just a slight deficit.
But next year could be much, much worse.
As of right now, the city is projecting a $54 million dollar deficit -- that's about 10 percent of the current operating budget. Chief Operating Officer David Panagore says the reason isn't because the city is spending too much; it's because its property tax income took a major hit.
"Even if you kept at your current spending levels, you're spending too much. So your income has disappeared while your household remains the same."
Two things have happened that make this year stand out. First, thanks to a legislative change to the way the city collects property taxes, the city lost its ability to apply a five percent tax surcharge to its commercial properties. That's a roughly $12 million loss.
Second, there's the issue of collapsing property values. The last tax bills were set when the market was high; this time around, there's been what's called a reval -- or revaluation -- and property values are now set at one of the lowest points in some time. So that's another $23 million -- gone.
Again, David Panagore.
"
The city's last reval was in 2006. Businesses and residents have been paying property taxes based on property values that was then the height of the market."
So while the upshot for residents and businesses is that their tax assessments are now set lower, the downside for the city is that means less taxable property value.
Panagore says the mayor and the city council are now beginning a process of evaluating their options before they figure out how to fill their $54 million hole.
