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City's Budget Shortfall Expected To Grow To $54M In 2012-13

By JENNA CARLESSO

February 08, 2012

HARTFORD — The city is facing a roughly $3.8 million shortfall for the current fiscal year, and a projected $54.4 million deficit for 2012-13, David Panagore, the city's chief operating officer, said during a special meeting Wednesday at city hall.

Panagore said the $3.8 million deficit was due in part to revenues falling short in the areas of tax lien sales and licenses and inspections, as well as an extra $1.7 million spent on police overtime, $1.1 million spent in connection with the October snowstorm, and an additional $784,000 allocated to Hartford public schools.

Another problem is tied to a state grant that shares video slot revenues from Connecticut's two Indian casinos with all 169 cities and towns. The city administration said that Hartford's share of the Mashantucket Pequot-Mohegan grant will fall about $1.5 million below the level built into the adopted budget.

The city so far has offset some of those problems with savings in salaries and employee benefits, and with property tax collections that have been higher than anticipated.

Despite the shortfall, Panagore said, the administration is "confident we're able to close that gap and end the year in the black."

The $54.4 million deficit for the next fiscal year stems from a projected revenue shortage coupled with increases in pensions, insurance and departmental payroll, or raises for city employees, city officials said.

If the city were to take no action to offset next year's deficit, Panagore said, it would be looking at a tax rate increase of 15.91 mills. A mill equals $1 for every $1,000 of assessed property.

Panagore noted that the tax rate increase was a worst-case, or "do-nothing," scenario. The impact of the city's revaluation and elimination of its longtime surcharge on commercial properties has added to the revenue problem, he said.

Several city council members who attended the meeting expressed concern over the projected shortfall and suggested exploring a variety of cost-saving strategies, such as shared services between the city and its board of education, charging entry fees for parks or recreation centers, further consolidation of city departments and reductions in public safety expenses.

Council President Shawn Wooden said the city needed to be "creative" with its investments, and avoid cutting from areas that eventually added to the city's revenue stream.

Mayor Pedro Segarra, who also attended the meeting, along with many of the city's department heads, called the deficit "a big challenge" but said he was optimistic about the upcoming budget process.

"A $54.4 million revenue gap is not an easy thing," he said. "But I think if we work together, smart and strategically, we can not only resolve these issues but also grow our grand list."

The meeting Wednesday was the first of four scheduled by the city in advance of the mayor's releasing his budget to the city council.

The next meeting, which will focus in greater detail on revenues and expenditures, will be held on Feb. 22 at city hall. Segarra's proposed budget is due to the city council on April 16.