April 28, 2006
By OSHRAT CARMIEL, JEFFREY B. COHEN And MARK PAZNIOKAS, Courant Staff Writers
In a bid to borrow time against a looming tax crisis in the city, Hartford officials were quietly working on cutting a deal with legislative leaders to blunt, once again, the dreaded effects of property tax revaluation.
But instead of sealing a deal behind closed doors and declaring city homeowners safe, Hartford Mayor Eddie A. Perez dropped a public bombshell Thursday - a threat to close schools and lay off cops and teachers if the General Assembly didn't act.
"We are days away from the city being forced to prepare to deeply slash city services," the mayor wrote in a release blasted out on e-mail by the mayor's press office just after noon Thursday. The $73 million worth of cuts would not take effect, however, until July 1, 2007.
The brash public statement startled - and offended - legislative leaders, with whom Perez had met only the night before in an effort to stall a revaluation of property in the city that threatens to double property tax bills for homeowners as the burden shifts from commercial to residential taxpayers.
Legislators said the meeting, which focused exclusively on Hartford's looming tax crisis, was productive. Even city officials acknowledged they were inching closer to a resolution.
But, said Matt Hennessy, the mayor's chief of staff: "Close does not equal a cigar."
That attitude irked House Speaker James A. Amann, D-Milford, who said that issuing a threatening press release while negotiations are continuing is simply not the proper way to conduct business. With legislative staff meeting Wednesday night and Thursday morning on the issue, the mayor's move, Amann said, is an affront to the General Assembly.
"I think that is political cowardice," Amann said. "I am just extremely disappointed in the mayor."
House Minority Leader Robert M. Ward, R-North Branford, characterized the mayor's actions as inappropriate.
"It's a form of bullying," Ward said. "It's outlawed in our public schools, but allowed in politics."
Perez's public missive also stunned business leaders.
R. Nelson "Oz" Griebel, head of the MetroHartford Alliance, said his group and the Connecticut Business and Industry Association have been working on tax plans with the city for months. He said he was surprised that Perez, in his release, branded them obstructionists and called them irresponsible corporate citizens.
"Because we don't agree with what the mayor says, [they say] we haven't been supportive," Griebel said. "The fact is we have been working very hard."
Perez said Thursday he decided to act because he wasn't satisfied with the pace of the negotiations. With less than one week left in the legislative session, and a public hearing on the city's proposed 2006-07 budget Thursday night, the mayor said he felt the need to illustrate the severity of the tax problem.
"I am frustrated," Perez said Thursday at the Capitol. "We're not making the progress we need to be making. We're still a long way off."
Neither the business community nor Hartford's own legislative delegation is unified behind any workable plan, said Perez, though he declined to single out Hartford legislators he deems as unsupportive.
The underlying issue is the property revaluation of October 2003, which has yet to be applied. Under that revaluation process, the value of property in the city doubled. If the new values were used to calculate taxes today, city homeowners - a constituency the mayor is trying to increase - could face a 60 to 130 percent increase in property taxes, the city says.
So in 2004, the state passed legislation allowing Hartford and other municipalities to delay implementing revaluation until the 2007-08 budget year. Perez plans to run for re-election in 2007.
With the postponement period coming to an end, Perez in March proposed a tax plan at the legislature designed to soften the revaluation burden on homeowners. That plan, which died in committee, would have tied property taxes to income levels for many residents.
Another plan to emerge - and die - called for applying the revaluation, but doing so by creating varying tax rates for commercial, residential and other types of property, Hennessy said. The plan would have allowed for a "very incremental shifting" of the tax burden to the residential property owners, he said.
But that plan faced problems, too. Like its predecessor, it met significant opposition from the business community, he said. Now, with the days of the session waning, Hennessy said the city's best option might be to seek a delay of revaluation again for two to four more years.
"The CBIA and the MetroHartford chamber have been very aggressive in opposing publicly any of the proposals that the mayor has put forward," Hennessy said. "It's been extremely disappointing that the chamber has consistently been unable to come out in favor of anything."
Griebel disputed that characterization, saying that having a plan different from the mayor's is not the same thing as not having a plan.
"Our conversations with the mayor go back to last November when we started down this road and, much like what happened two years ago ... we couldn't find common ground," he said. "We didn't think any of the proposals were helpful in trying to position the city as open for business and for future investment."
Instead, the business community has two goals: go forward with revaluation and eliminate the corporate surtax, Griebel said. In their latest plan, business leaders proposed moving ahead with revaluation, phasing out part of the corporate tax and limiting residential property tax increases over time.
Griebel said the business community is steadfastly opposed to delaying revaluation because it will only "postpone the pain" and send an uncertain message to businesses about future taxes, and could push Hartford down the road to financial insolvency.
Griebel went out of his way, though, to say that while the business community differs with Perez on this issue, it still believes in him as mayor.
"There's the old adage: It ain't personal, it's business," Griebel said. "I don't think you should read into that that it's a lack of respect for Eddie or that somehow the relationship has soured."
Courant Staff Writer Rachel Gottlieb contributed to this story.
Reprinted with permission of the Hartford Courant.
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