20090507LettertoGov.RellreHartford

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May 7, 2009
The Honorable M. Jodi Rell
Governor
State of Connecticut
210 Capitol Avenue
Hartford, CT 06106
Dear Governor Rell:
On behalf of the City of Hartford Republican Town Committee (RTC), and in view of the dire
financial conditions facing the City of Hartford in the coming fiscal year and beyond, this letter
respectfully requests that you and your Administration consider taking any and all actions
necessary to restore the financial functionality of our City’s government. For the following
reasons, the RTC believes that State intervention, in the form of municipal financial emergency
legislation, may be the only way to ensure the City’s economic survival.
On April 20, 2009, Mayor Eddie A. Perez presented his budget message to the Court of Common
Council, and outlined his proposed $548 million budget for fiscal year 2009-2010. The proposed
budget purportedly freezes spending and increases the City’s mill rate by thirteen percent to
77.23 mills, which would remain the highest in Connecticut. If the Mayor’s budget is ultimately
adopted by the Council, Hartford’s mill rate will have increased by sixty-one percent over the
last nine years. These dramatic tax increases have sharply decimated the City’s grand list, and
the proposed budget will cause the constant outflow of companies and jobs to continue, as
businesses will likely opt to relocate outside of the City, or leave the State altogether.
Over the last decade, the City’s seemingly isolated financial decisions on spending and taxation
have negatively impacted not only Hartford and its residents but also the State as a whole, as
large companies such as ING, MetLife, WFSB Channel 3, and others have elected to leave the
City for lower-cost business environments. Even those companies that have maintained a
presence in the City, including The Travelers Companies or The Hartford, often look to suburbs
such as Bloomfield, Simsbury or Windsor when they seek to expand. Unfortunately, this year’s
proposed budget is notable in that the brunt of its impact -- when combined with the effects of a
long-delayed property revaluation -- will devastate Hartford’s small businesses, which are facing
tax increases of 20 to 30 percent. Not surprisingly, several long-standing City institutions are
considering closing their doors for good.
Raising taxes in difficult times such as these can only deepen the City’s economic death spiral,
as fewer people are likely to register their cars or pay their property tax bills on time, and those
City residents with the means to flee to the suburbs will continue to do so. A mill rate of 77.23
mills makes it increasingly difficult for people, especially the working poor, to buy or maintain
homes in the City. With a seemingly inevitable financial catastrophe looming on the horizon,
clearly something must be done to stop the City from spending so much money: even by the
Mayor’s best estimates, the City budget will grow to $589 million next year, and to $742 million
in 2014. Because there are no new initiatives planned to significantly boost the City’s grand list,
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triple-digit mill rates can be expected in 2011 or 2012, and soon there will be nothing left for the
City to tax.
As Republicans, we must credit Mayor Perez for the few steps he has taken to reduce the size
and scope of the City’s government to date, as several City and Board of Education employees
have been laid off in the past year. However, Mayor Perez’s proposed budget remains far too
large, especially when compared to those of other similarly-sized cities in the State. For
example, in Connecticut’s largest city, Bridgeport, the mayor has proposed a $490 million
budget and a 44.6 mill rate for 2009-2010; ironically, despite having a ten percent larger
population, Bridgeport’s proposed budget is ten percent smaller than Hartford’s. Also, in New
Haven -- which has a population almost identical to that of Hartford -- the mayor has proposed a
$464 million budget, which is fifteen percent smaller than the budget proposed by Mayor Perez,
and calls for a 42.2 mill rate. Finally, in Stamford, the mayor has proposed a $453 million
budget and a 17.2 mill rate for his city of 118,000 residents, who have seen robust urban
redevelopment in their city due to its low tax rates. Even though Hartford’s proposed budget is
over $50 million higher than Bridgeport’s, New Haven’s or Stamford’s, it cannot be argued that
Hartford enjoys a higher quality of life, education or public safety than any of these cities,
leading us to collectively wonder what, exactly, the City is buying with all of our money.
Given the current administration’s propensity for raising taxes, and its inability to rein in City
spending, the RTC joins me in respectfully requesting that you and your Administration consider
State intervention as a means to restore the City to financial health and self-sufficiency. As you
know, there is significant precedent for State intervention on behalf of municipalities that are
failing financially: the State has provided varying degrees of emergency relief to Waterbury,
Bridgeport, Jewett City and West Haven over the last 30 years.
Specifically, the RTC encourages you to consider creating a State-run oversight board, similar to
the Waterbury Financial Planning & Assistance Board (WFP&AB), to oversee all aspects of
financial management and planning in the City of Hartford. The WFP&AB, which was created
on March 9, 2001, under Special Act 01-1, was an objective and apolitical body with broad,
discretionary powers to make important and necessary financial choices that Waterbury’s mayor
and board of aldermen were unable or unwilling to make at the time. In particular, the
WFP&AB performed a top-down review of the size and structure of the city’s government, and
made a number of difficult yet critical decisions to modernize the city’s operations and remove
long-standing inefficiencies that had cost its taxpayers dozens of millions of dollars. As a result,
after half a decade of the WFP&AB’s oversight, the Brass City is now in the most sound
financial shape of any of Connecticut’s post-industrial cities. A similarly empowered oversight
board could have the same positive impacts here in Hartford, and provide a fresh start in
revitalizing the City for the 21st Century.
In closing, we understand that having the State usurp the powers of a duly elected municipal
government would be a truly Draconian act. However, the RTC and I believe that the City’s
present financial predicament compels the State to act on behalf of Hartford’s residents and
business interests. Accordingly, we respectfully request that your Administration consider
proposing an emergency legislative remedy similar to that set forth in Special Act 01-1, in order
to take control of the City’s financial operations and reduce its soaring spending. Nothing less
than the very survival of one of America’s original cities, which once held a proud reputation as
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a worldwide leader in the manufacturing, insurance, finance and defense industries and a retail
destination for shoppers from all over New England, is at stake.
Thank you very much for your consideration.
Sincerely
Michael T. McGarry
Chairman
City of Hartford Republican Town Committee
176 Whitney Street
Hartford, CT 06105-2269
[email protected]
Cc:
Hon. Eddie A. Perez, Mayor, City of Hartford
Hon. Denise L. Nappier, Treasurer, State of Connecticut
Marc S. Ryan, Secretary, State of Connecticut Office of Policy and Management
Senator John W. Fonfara (D-1st District)
Senator Eric D. Coleman (D-2nd District)
Representative Kenneth P. Green (D-1st District)
Representative Minnie Gonzalez (D-3rd District)
Representative Kelvin Roldán (D-4th District)
Representative Marie Lopez Kirkley-Bey (D-5th District)
Representative Hector Robles (D-6th District)
Representative Douglas McCrory (D-7th District)
Christopher Healy, Chairman, Connecticut Republican Party
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