Hartford Council Considers Ways To Close $56M Projected Deficit
By Jenna Carlesso
March 28, 2012
HARTFORD— With less than three weeks until Mayor Pedro Segarra releases his 2012-13 budget, the city council Wednesday looked for ways to close a $56.2 million projected deficit.
Council members considered 15 ideas — which stemmed from discussions at previous budget workshops — for saving money or generating new revenue. Among them were raising the mill rate, reducing employee pension contributions, drawing from the city’s emergency, or “rainy day,” fund, layoffs, furloughs, wage cuts for city employees, selling more advertising through billboards and bus shelters, consolidating city departments or city and school operations, selling off city assets, such as a parcel of land adjacent to Batterson Park in Farmington, cutting contributions to the public library and implementing a voluntary payment in lieu of taxes program.
City officials have said that the looming deficit is due in large part to the property revaluation. The city will take in about $35 million less in property tax revenue due to the decline in market values and the elimination of a surcharge on commercial properties. It will also see expenses rise about $21 million, with payroll, pension contributions and money for schools going up.
Several council members on Wednesday said they would support furloughs and eliminate vacant jobs — of which there are 108 on the city workforce — but were generally averse to layoffs, wage cuts and drawing from the city’s rainy day fund, which currently has a balance $23.5 million — about 4.5 percent of Hartford’s general fund.
Some, including Councilmen Kenneth Kennedy and David MacDonald, supported the consolidation of city departments or school and city operations.
A few, like council members Larry Deutsch and Cynthia Jennings, said they would support creating a voluntary payment in lieu of taxes program, in which institutions like churches, hospitals and nonprofit or charitable organizations — those that are not taxed — would contribute some amount of money to the city. A little more than half of the city’s properties are non-taxable, Chief Operating Officer David Panagore said.
Many members spoke out against cutting public library funding, saying the city would have to find other ways to offset the shortfall. They noted that the library provides critical programs and a place for people to go.
“Especially with the recession, it’s the worst time to cut the library budget,” Deutsch said.
Several spoke in favor of furloughs. Deutsch suggested scaled furloughs, meaning the larger an employee’s salary is, the more furlough days he or she would be required to take. For example, he said, someone making an annual salary of $70,000 or $80,000 could take seven furlough days while someone making $150,000 could take 15.
Council President Shawn Wooden said furloughs were a welcome alternative to layoffs.
“It’s tough when people get hit with them, but it’s an opportunity to keep jobs.”
Panagore said the furloughs would affect nearly all city departments, except for critical services like police and fire. “Essentially, city hall closes down,” he said.
When the discussion turned to raising the city’s tax rate, currently at 71.79 mills, only a few council members offered their opinions. Some said they would be in favor of increasing the rate by a few mills, while others said they didn’t like the perception it gave off. A mill equals $1 for every $1,000 of assessed property value
Because of declining property values, Panagore said, raising the tax rate by a few mills wouldn’t translate into a tax increase for the average Hartford homeowner. The city would have to raise the tax rate by eight mills for the average homeowner to see a modest tax increase, he said.
Still, Jennings said, raising the tax rate will drive people away.
“The perception is so bad we’re going to lose people moving into Hartford,” she said.
Wooden and Panagore both cautioned Wednesday against using gimmicks, or short-term fixes, to close the gap.
“We are in a five-year problem,” Panagore said. “This will repeat next year. Using one-time sources of revenue would just be playing for time.”
Reprinted with permission of the Hartford Courant.
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