Bankruptcy for Hartford Considered Final Option - NBC Connecticut

Bankruptcy for Hartford Considered Final Option

Bankruptcy Hartford

(Published Monday, Aug. 29, 2016)

Hartford Mayor Luke Bronin wouldn't rule out the possibility of the City of Hartford filing for a municipal bankruptcy, but did say he's trying to stave off such a possibility.

"(In Connecticut) we ask a city like Hartford which has real city problems to run itself on a property tax base which actually has less taxable property than the town of Glastonbury or the town of West Hartford or the Town of Manchester. That’s a system that’s fundamentally broken.”

NBC Connecticut asked Bronin earlier in the year about the prospect of a bankruptcy earlier in 2016 when he released his city budget proposal for the 2017 fiscal year.

The Hartford Courant raised the question Monday morning in an editorial about the city's dragging finances, especially in light of a city report detailing how the $56 million stadium and neighborhood development has ballooned into a $102 million taxpayer funded debacle. The stadium alone will cost taxpayers more than $71 million, if it evers gets completed.

UConn Law Professor Dalie Jimenez teaches classes about contracts and bankruptcy. She wouldn't speak specifically about Hartford's finances but did say that filing for what's known as Chapter 9, is a drastic step for a city to take.

“You’re in so deep that you need outside help," she said. The filing would protect the city from creditors looking to collect on the debt they had purchased from the city.

"They bought it because they thought you were a good bet that you would be able to get what you told them you would be able to get.”

Bronin has previously advocated for labor concessions, city service and staffing cuts, and more recently help from Hartford's neighbors in rescuing it from fiscal ruin.

"We’re willing to make the hard decisions we have to make. We have no lack of political will and we’re willing to go after even the most sacred cows but when you’ve got a system like ours that’s just broken, where you have gaps of $50 and $120 million looming in the future, you’ve got to change things now if we’re going to succeed as a state and as a region by having a city that is the center for energy and for economic growth," he said.

Bronin said raising taxes isn't a possibility because the taxes in Hartford are already the highest in the state.

“On the tax front I think taxes have been raised so much over the past years that we’re probably past that point and that’s why this conversation is so urgent, it’s so immediate that if we as a state and as a region want to have a strong Capital City, we’ve got to come together in a different way."

Jimenez, with UConn Law, explained that legally the city could only file for bankruptcy with permission from the state of Connecticut.

She said it would truly be viewed as the final option in order to save the city's finances, but she did warn that it's only a first step toward a path to fiscal sustainability.

"Just because you file for bankruptcy that doesn't make you more profitable or run better," Jimenez said. "All you get is temporary protection from those who own your debt."

   

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