Mayor Says Hartford Facing Budget Deficits This Year And Next
By JENNA CARLESSO
February 21, 2013
HARTFORD —— The city is facing a $9.4 million shortfall for the current fiscal year and a roughly $70 million deficit for 2013-14, according to early projections released Thursday.
City finances were discussed during the first public budget meeting of this year at city hall.
Mayor Pedro Segarra told a room of department heads and city council members that next year's deficit would be the worst the city has had to grapple with.
"I am certain this will be the most challenging budget that any of us has had to deal with," he said.
Segarra said a sluggish economy, coupled with Gov. Dannel P. Malloy's budget proposal, has created a tough situation for the city.
Malloy's budget eliminates reimbursements to cities and towns — payments in lieu of taxes — for state-owned property that the municipalities can't collect taxes on. The budget redistributes that money into the state's Education Cost Sharing program, which pays for cities' and towns' education initiatives. Hartford's share of those PILOT reimbursements is about $13.5 million, city officials have said.
Malloy's plan also effectively redistributes video slot revenue from the Mashantucket Pequot and Mohegan Indian tribes to towns and cities through the local capital improvement program, to be used for road, bridge or public building construction projects. Though the governor's proposal benefits education and infrastructure, municipalities would lose out on funding for general government operations.
The shortfall for the current fiscal year stems from money that the mayor has agreed to pay into the city's pension fund that hadn't been included in the budget for the current fiscal year.
When the city adopted its 2012-13 budget in May, it set aside roughly $20.6 million for contributions to the municipal employees' retirement fund. But the mayor and the city's pension commission subsequently drew up a memorandum of understanding saying the city would pay an additional $11 million into the pension fund after city Treasurer Adam Cloud raised concerns about not meeting pension obligations, which require that the city pay $31.6 million.
Officials said Thursday that they have paid off roughly $2.5 million of the $11 million owed, leaving about $8.5 million. In addition to that, the city is facing a revenue shortage of about $851,000, officials said.
Saundra Kee Borges, Hartford's interim chief operating officer, pointed out that the city is still waiting for $9 million in reimbursements from the state for school construction projects. She said the city is "very optimistic" it will receive that money, but if not, the shortfall could grow.
Next year's deficit stems primarily from decreases in state aid to the city and increases in pension contributions, benefits, debt service and contractual pay raises.
City officials said they are exploring several options for closing the gaps both years, including delaying hiring for vacant positions, selling city-owned property, improvements in tax collection and the potential sale of the Morgan Street parking garage.
Segarra's proposed budget is due to the city council on April 15. The city has until May 31 to adopt its budget for 2013-14.
Reprinted with permission of the Hartford Courant.
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