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Hartford Looks To Spending Cuts To Close $8 Million Hole

By JENNA CARLESSO

May 10, 2012

HARTFORD

Whether or not a bill that would allow the city to collect $8 million needed to balance its budget is revived during a special legislative session, some city leaders said Thursday they're not counting on the money, looking instead to spending cuts or a larger tax rate increase.

The bill, which the city's legislative delegation reached a deal on Wednesday after other attempts stalled, died in the House when the regular session ended at midnight. Mayor Pedro Segarra had been counting on that money to help offset a $56.2 million deficit in his proposed 2012-13 budget.

The legislation would have allowed the city council to raise the assessment ratio for apartment properties from 50 percent to as much as 70 percent next year, essentially collecting more in taxes. It also called for a state review of the city's tax structure.

Legislators said Thursday that June 25 is the tentative date for the special session. The city's deadline to adopt its budget is May 31.

House Majority Leader J. Brendan Sharkey of Hamden said the bill likely won't be raised again during the special session.

"At this point, no, because the scope of the special session is limited to issues involving the state budget. That, to my mind, would not fall under the parameters of the special session," he said of the bill.

Senate President Pro Tem Donald Williams said legislators would explore the option of bringing it back.

"It's significant for them," Williams said of the city administrators, "and I'm sure we'll be talking about it and seeing if anything is possible."

But city council President Shawn Wooden said Thursday that he's not banking on the funds.

"We are charged by the charter to produce a balanced budget, and in order to do that we have to rely on revenues that are real, that we can see," he said. "This revenue stream will not be available and our budget will reflect an additional $8 million [cut].

"It certainly does leave hard choices for the council."

The city council is scheduled to meet on Thursday to amend the mayor's proposed $546.6 million budget. Wooden said a higher tax rate increase is a "likely result" due to the failed legislation.

Segarra has already recommended a tax rate increase of 3.5 mills. A mill equals $1 for every $1,000 of assessed property.

"Two weeks ago I would say there was certainly a strong desire and maybe even a consensus to try to further reduce the mill rate from the mayor's proposed budget," Wooden said. "Given this loss of assumed tax revenue, [raising the tax rate] is absolutely a possibility. That is not what the council started at, but that is where we are today."

Segarra said Thursday that he is considering several ideas, including a steeper tax rate increase, additional spending cuts, adjusting revenue estimates, drawing money from the city's rainy day fund and advocating for the tax bill to be brought up again in the special session.

"We have to come up with a balanced budget, so the burden now is on me and others at city hall to make this work," he said.

Asked if he regretted including the $8 million in his budget without a guarantee from the legislature, he said: "There's no regrets. You do the best you can with what you have and take people at their word. It was a workable solution; it wasn't farfetched."

The mayor and members of the city delegation have said that the bill died because of a disagreement between legislators and the MetroHartford Alliance. Oz Griebel, CEO of MetroHartford, noted Thursday that he had agreed to an earlier bill, which also would have raised the assessment ratio for apartments. The earlier bill would have also raised the assessment ratio on residential property owners.

"This whole thing has been about keeping the essence of the agreement," Griebel said. "There wasn't an agreement with all the parties."

Wooden said city leaders should stop placing blame.

"I don't feel we should continue to point fingers, and from what I've been reading there's been a bit of that," he said, referring to statements released by the mayor that put fault on legislators and the MetroHartford Alliance. "Now is not the time to point fingers, but for the council to just roll up their sleeves and solve this budget problem."

Councilman Kenneth Kennedy said he is still optimistic that the council could minimize a tax rate increase.

"You won't get a 6 mill increase. You won't even get a 3.5 mill increase; our mill rate is too high to begin with," he said Thursday. "I think the council will go more toward spending cuts, but the question is where."

Wooden said council members are seeking confirmation on other sources of revenue that the mayor has built into his budget including $1 million he is counting on from a new payment in lieu of taxes program and $9 million he's seeking in school construction project reimbursements from the state before deciding whether the adopted budget should include them.

"If we don't get confirmation, we may adopt a budget that doesn't rely upon those numbers," Wooden said. That could lead to further spending cuts or tax rate increases, he added.

Reprinted with permission of the Hartford Courant. To view other stories on this topic, search the Hartford Courant Archives at http://www.courant.com/archives.
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