HARTFORD — A plan to have the state of Connecticut eventually pay off $550 million of its capital city’s debt has become a point of contention in the crowded governor race.
Democratic candidate Guy Smith said he understands why the deal was made, but acknowledges, “It’s a little more generous than what I would have looked for,” while Republican candidate David Walker said, “State taxpayers are already overburdened with debt, and this will only make it worse.”
Republican Mike Handler, who unveiled a plan to revitalize cities last week, said he believes the state will end up spending up to $900 million on the Hartford deal, arguing that such practices reward cities for “bad behavior” and don’t improve their long-term viability.
“We’re not going to see real job growth as a state until we restore stability to our cities,” he said.
But Hartford Mayor Luke Bronin, who is exploring a Democratic run for governor himself, argues that having the state assume Hartford’s debt over the next 20 years will help the city avoid bankruptcy, stabilize its finances and grow the economy.
“When you combine this agreement with the deep cuts we made, the significant labor savings we achieved and the commitment from our corporate community, we can see a path to balanced budgets for the next five years,” he said.
Bridgeport Mayor Joe Ganim, who is seeking the Democratic Party’s endorsement for governor, asked the state this week for a deal to help retire outstanding debt and provide his city with additional aid in light of the Hartford agreement. He is also seeking more information about the agreement between Hartford and the state, recently filing a public records request. While he supports stabilizing Hartford’s finances, Ganim said there was “a lack of clarity” in the budget that included assistance for troubled cities.
“It appears that both Democratic and Republican legislative leaders were uninformed that this agreement assumes and pays off Hartford’s bond debt over the next 20 years,” he said, echoing sentiments made by the two GOP leaders of the General Assembly, who claim they only agreed to provide the city $40 million, not $550 million. They’ve proposed scaling back the deal to $40 million.
Malloy’s budget office disagrees the legislation was unclear, with a spokesman recently saying the lawmakers should “look no further than the closest mirror” if they don’t like the terms of the agreement.
Bronin has insisted that a long-term plan is needed to help Hartford without “doing things that might buy time but make the problem worse down the road.” He has cited the city’s debt, pension obligations and the lack of taxable property as being at the root Hartford’s fiscal problems.
While the city expects to refinance the $550 million debt into annual payments that will not exceed $40 million, Bronin acknowledges it won’t solve all of Hartford’s problems. For example, the city still has one of the highest local property tax rates in the state.
Griebel this week sent a letter to Malloy’s budget chief, Ben Barnes, who co-chairs the municipal oversight board helping troubled cities and towns avoid insolvency. Griebel urged the adoption of a strategic plan for Hartford that includes things like capping growth in the city’s annual budget for the next five years, privatizing certain city services and having bond-holders waive interest payments for five years. Handler’s plan calls for renegotiating public labor contracts and making benefits more closely resemble the private sector.
