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Hartford Mayor, Facing Big Deficit, Asks Department Heads For 3 Different Budgets

By JENNA CARLESSO

February 25, 2013

HARTFORD —— Facing a projected $70 million deficit in the next fiscal year, Mayor Pedro Segarra has asked all city department heads to submit three proposed budgets: one that keeps spending flat, one that reduces spending by 5 percent and another that reduces it by 10 percent.

The flat budget proposals are due Tuesday, said Maribel La Luz, Segarra's spokeswoman. The budgets with reduced spending would probably be submitted next week, Jose Sanchez, the city's director of management, budget and grants, has said.

Depending on what proposals are chosen, the city could see more layoffs, spending cuts or elimination of vacant positions, officials said. Segarra in September laid off 14 city employees, mostly from middle management, and eliminated five vacant jobs in an effort to balance the current budget.

Once the budget proposals are submitted, Segarra will sit down with each department head and review the budgets line item by line item. He'll then determine which expenses are worthwhile, La Luz said.

The mayor plans to review the budgets in March and April, leading up to the release of his own proposed budget April 15.

Early projections show that Hartford has deficits of about $9.4 million this fiscal year and $70 million in the next.

Segarra said last week that a sluggish economy, coupled with Gov. Dannel P. Malloy's budget proposal, has created a tough situation for the city.

Malloy's budget eliminates reimbursements to cities and towns — payments in lieu of taxes — for state-owned property on which municipalities can't collect taxes. The budget redistributes that money into the state's Education Cost Sharing program, which pays for cities' and towns' education initiatives. Hartford's share of those PILOT reimbursements is about $13.5 million, city officials have said.

Malloy's plan also effectively redistributes video slot revenue from the Mashantucket Pequot and Mohegan Indian tribes to towns and cities through the Local Capital Improvement Program, to be used for road, bridge or public building construction projects. Though the governor's proposal benefits education and infrastructure, municipalities would lose out on funding for general government operations.

The shortfall for the current fiscal year stems from money that the mayor has agreed to pay into the city's pension fund that hadn't been included in the adopted budget. Next year's deficit is due primarily to increases in pension contributions, benefits and the debt service, and decreases in state aid to the city, officials said.

City administrators said they are exploring several options for closing the gaps both years, including delaying hiring for vacant positions, seeking employee concessions, selling city-owned property, delaying contributions to the city's pension fund, improving tax collection and the potential sale of the Morgan Street parking garage.

During a presentation at city hall last week, officials said that if no steps are taken to offset the deficit, the city would face a tax rate increase of 21.56 mills in 2013-14. A mill equals $1 for every $1,000 of assessed property. The city's current tax rate is 74.29 mills.

Segarra warned last week that next year's deficit would be the most difficult that the city has had to grapple with. The city has until May 31 to adopt its 2013-14 budget.