The president of the Hartford City Council along with other members are standing in opposition to the capital city declare bankruptcy.
Council President TJ Clarke II, Minority Leader Wildaliz Bermudez, and Councilmembers Larry Deutsch, Cynthia R. Jennings, and Jo Winch held a news conference on Monday afternoon. They are hoping to stop bankruptcy from happening.
"We do not want bankruptcy for our city. Bankruptcy would put us in a very devastating place for our communities, our families and our students and businesses," said Council Minority Leader Wildaliz Bermudez.
They are calling for the following items: The necessity of the Connecticut General Assembly passing a budget this week with the full payment of the City of Hartford’s owed PILOT funds The City of Hartford Court of Common Council to hold public forums/public hearings on the consequences of declaring bankruptcy and possible alternative restructuring options.Hartford Mayor Luke Bronin sent a letter to lawmakers and Gov. Dannel Malloy on Thursday in which it stated that the capital city is on track to run out of money in 60 days, without a state budget.
"If the state fails to enact a budget and continues to operate under the governor's current executive order, the City of Hartford will be unable to meet its financial obligations in approximately sixty days," Bronin wrote in the letter last week. "If there is no budget or additional state funding in place at that time, we anticipate seeking authority to file Chapter 9 [bankruptcy]."
Clarke said the city of Hartford needs the help of the Connecticut General Assembly "now more than ever."
"Let me be clear that, in the absence of a state budget, Hartford will have no choice but to move toward bankruptcy. Obviously, I do not want to go down that road unnecessarily, and I hope the State adopts a responsible budget as soon as possible. Regardless of what I believe, we have to remain focused on a true, long-term solution, and we can't rule anything out until we achieve that," Clarke said in a statement on Monday.
The issue was a topic of an I-Team investigation that Channel 3 aired last November.
Bronin said the city has already exhausted its options of fund balance, large numbers of layoffs, and service reductions.
He said Hartford cannot cut its way out of the crisis.
He cited Moody's Investors Services report from last month that said any further cut eliminate rather than reducing core services.
Bronin said the state has three options.
First, it could give Hartford just enough assistance to avoid short-term liquidity problems.
Second, it could write off the city's problems as "unsolvable," which would require a Chapter 9 filing in the coming weeks. Bronin said if that's the case, Connecticut would be the first state in the nation to have its capital city go bankrupt.
Permission would need to come from Gov. Malloy as required by state law. Then the city would have to prove in court that they are out of money and unable to pay bills.
Bronin said he hopes that is the last option, saying "We have a capital city built on the tax base of a suburb."
Fifty percent of the property in Hartford is tax exempt. The current shortfall is about $50 million.
"We are asking the state to at a minimum fully fund the payments in lieu of taxes formula that has been on the state books for many many years that has been dramatically underfunded.," Bronin said.
Lastly, the state could "embrace a farsighted, collaborative approach" in a partnership with Hartford to help put the city on a sustainable path.
This path would include fairly reimbursing the city for what Bronin called a "disproportionate share of nontaxable property." It would also help Hartford create a path for fair labor contracts that it can afford and insist that bondholders and other stakeholders participate in the solution.
Bronin said the last option is the wisest and most responsible course of action.
Hartford's crisis couldn't happen at a worse time. The state itself is in a financial mess and lawmakers can't even agree on a budget.
"It would be the first state in the nation where its capitol city is declaring bankruptcy,” said Ken Goroshko, economics professor at the University of Hartford.
He says one the Hartford’s biggest challenges is what we have been hearing for a while… We need more jobs and keep young people from leaving. He says that can't be done without a partnership.
"The state of CT is part of this relationship - there's a symbiotic relationship between the two - you can't talk about the city of Hartford in isolation,” Goroshko said.
Copyright 2017 WFSB (Meredith Corporation). All rights reserved.