Tax-exempt property and the impending departure of Aetna are two issues weighing heavily on Hartford as the capital city manages a fiscal crisis.
Lawmakers, back for a special session to deal with the state’s budget, are hoping for a solution that doesn’t include municipal bankruptcy.
The timing couldn’t be worse. Hartford’s asking for an additional $40 million in aid at a time when the state is facing its own fiscal crisis.
The city’s mayor has been hinting at filing for bankruptcy for months. But House Majority Leader and Democratic State Representative Matt Ritter, speaking on WNPR’s Where We Live, said bankruptcy would likely spill over to the suburbs and the state pretty quickly.
"I think the state’s credit rating, which has already been downgraded a couple times in the last year, would be downgraded again potentially," Ritter said. "Hartford is also part of the MDC with neighboring towns. They issue bonds that are then paid for backed by the towns. So I think there’s some real implications. That just means higher borrowing costs, higher property taxes for neighboring towns.”
Hartford faces rising debt and pension obligations. In addition, more than half of the city’s real estate -- such as government departments, colleges, and hospitals -- are tax-exempt.
Governor Dannel Malloy has proposed an oversight board in exchange for state assistance.
Ritter said another possibility legislators have discussed is adding a food and beverage tax for restaurant diners of up to one percent. He said it could potentially bring in $5 to $10 million in one year.