With their city staring down the barrel of cash shortfalls in coming months, Hartford residents voiced their concerns over the city’s fiscal future at a town hall meeting Wednesday night.
Robin Standifer told Mayor Luke Bronin that a dramatic increase in state aid to the city — one of the things Bronin called for to help Hartford survive mounting levels of debt — was “pie in the sky.”
“Let’s be real — the state is not going to dramatically increase state funding,” Standifer said. “You know it; I know it. At the end of the day, Hartford is going to have to do what it needs to do, because the state is not doing what it should be doing.”
Bronin said earlier the state needed to chip in more to offset large swaths of city property which are tax-exempt but nonetheless offer services that are vital to the rest of the state, such as health care and social services. Hartford, he said, is operating within “a structure that’s fundamentally broken.”
Alyssa Peterson criticized Bronin for not pushing hard enough to reform the property tax system, which she called discriminatory.
“You’re an attorney — from day one, I’ve never understood why you didn’t go to federal court and say, ‘This property tax is discriminatory,’ ” she said. “In Hartford, this system doesn’t work.”
“I really don’t care for your messaging,” Peterson said. “You have not painted a picture of how long this has been happening, how long we’ve had to cobble and paste together funds for years.”
Her comments touched on a common refrain: Hartford residents were tired of going to the state with their hand out, only to be turned away.
“We all have to get it in our head that this [money] is owed to us,” said Leslie Hammond. “We are not the poor step-child of the state, who has to beg for their money.”
Bronin said he agreed with their concerns — Connecticut benefits from a healthy capital, which is not only the seat of government but the center of health care, education and social services for the state, he said, and he believes the state should have an obligation to help Hartford.
“But in a legal sense, they don’t,” he said. “This is a game of persuasion. The problem in Connecticut is we’re so parochial and narrow-minded, we don’t look beyond the borders of our towns. But we, as a state, better come quickly to the realization that states depend on strong metro areas with strong urban cores.”
Bronin — who wants to restructure and reduce city debt -- has resisted offers from Hartford’s largest bond insurers to simply refinance what it owes, particularly with uncertainty over any increase in state assistance. Assured Guaranty, which insures $311 million in city bonds, proposed spreading out the city’s payments further into the future, which would reduce immediate contributions but increase the amount of interest paid out overall. Bronin said Monday he “is not interested in pushing off this challenge for another mayor or another generation to fix.”
The following day, Standard & Poor’s dropped Hartford’s already abysmal bond rating four more notches, from B- to CC. The city expects a cash shortfall of $7 million in November and $39 million in December, and the agency warned Tuesday that “a default, a distressed exchange or redemption appears to be a virtual certainty.” Standard & Poor’s had already deemed the city’s bonds “junk.”
“Here’s how I view those rating agency actions,” Bronin said Wednesday. “Number one, your credit rating matters most when you’re looking to borrow money … at present, we don’t have the capacity to borrow money, even if we could access the market. We don’t have the ability to keep piling debt on a deficit.”
“The second thing is, what the ratings agencies are saying is essentially the same thing we’ve been saying,” he continued. “That you have a structure that’s not built to work; that you have a capital city that’s already taken dramatic measures to reduce expenses.”
Hartford’s rating has sunk because Standard & Poor’s recognizes there is no fat left to trim, he said, and with property taxes already among the highest in the state, the city can’t tax its way out, either.
“They believe if the city of Hartford were to continue to make reductions, it wouldn’t be a question of what services you reduce,” he said, “but what services you eliminate.”
Bronin has requested $40 million from the state legislature to address expected cash shortfalls in the coming months, without which the city could be forced to declare bankruptcy, he said.
On Wednesday night, resident Tom Cox asked whether the city could still declare bankruptcy if it received the $40 million.
“We cannot take any option off the table,” Bronin said. “$40 million does not solve the problem. Even if it came every year, it does not solve the problem.”
Wildaliz Bermudez, a city councilwoman who previously called Bronin’s consideration of bankruptcy “undemocratic,” questioned whether basic services would be met if Hartford filed for Chapter 9 bankruptcy protection.
“If we were to file for bankruptcy, how can we make sure we continue caring for our residents if we don’t have a base who are employed?” Bermudez asked.
Filing for bankruptcy, Bronin said, “does not mean people get fired.”
The city has already cut personnel as much as it can bear, he said, and is operating “at a truly bare-bones level.”
“Some cities have looked at bankruptcy as something to be avoided at all costs,” he said, pointing to Detroit as an example, which put off filing for bankruptcy “longer than maybe they should have.”
“They abandoned residents and stopped delivering residents basic services,” Bronin said. “And that’s something we cannot do.”