With the Connecticut state budget at an impasse, and the city in the throes of a structural budget problem that projects a $50 million deficit this year alone, Hartford is looking for options.
So, on Thursday, Mayor Luke Bronin announced he’s hired a law firm to meet with creditors, pensioners, and others -- all in an effort to find a way for the city to survive financially.
“We’ve engaged a firm that has extensive experience in restructuring, including municipal restructuring,” Bronin said, who hired the firm Greenberg Traurig. “And they’re going to be working with us to look at all of the options that are available to us.”
Bronin has spent his entire term in office telling lawmakers and state residents that the capital city's budget has a structural problem. Half of the city's property is tax-exempt. That makes funding the city's obligations and basic needs exceptionally difficult.
The city finished the last fiscal year with a $10 million deficit. It projects a $50 million deficit for this year.
Without a state budget, the picture only gets worse. The General Assembly's inability to pass a budget plan by the end of the fiscal year has pushed Hartford closer to the brink of bankruptcy.
“Right now, we’re in a world where there is no state budget,” Bronin said. “And the spending plan that is governing the state in the meantime cuts about $50 million for us. So, we’re entering the new fiscal year with no state budget and with a gap of about $100 million.”
Under state law, the city would need approval from the governor to seek Chapter 9 protection. But Bronin is clearly pushing for alternative solutions. An obvious one, he said, would be for the state to fully fund what’s called the PILOT program. The acronym stands for Payments In Lieu of Taxes, and the program is intended to reimburse towns and cities like Hartford for tax payments they lose out on from tax exempt properties. In Hartford, that amounts to roughly half of its entire tax base.
Democratic legislative leaders have said that Hartford would likely get the fiscal relief it needs, but it won't come without strings. That said, that only happens if there's a new state budget. And there isn't.
