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Set To Announce Budget Monday, Mayor Works To Close $56.2 Million Deficit

By JENNA CARLESSO

April 14, 2012

HARTFORD —— When Mayor Pedro Segarra releases his proposed 2012-13 budget Monday, he'll have to offset a revenue shortfall of $56.2 million — roughly 10 percent.

Although Segarra and other city officials have declined to say exactly how they expect to close the gap, they offered clues to the solutions they're exploring.

David Panagore, the city's chief operating officer, said that the mayor has identified a savings target he is hoping to achieve through concessions from both union and non-union employees. While layoffs likely won't be built into the budget, he said, they could become a reality if the city is unable to achieve the savings through give-backs, furloughs and other cost-cutting measures.

Panagore declined to disclose the savings target, saying the city is still negotiating with the unions.

Larry Dorman, a spokesman for the American Federation of State, County and Municipal Employees Council 4 Local 1716, which represents about 400 city employees, said the union has been working under a contract that expired in June 2011.

"We've been in discussions with the city, and we're hopeful we can reach a fair reolsution," he said Friday. Dorman declined to discuss specifics about the negotiations.

City officials have said the deficit is due in large part to property revaluation. The city will take in about $35 million less in property tax revenue due to declines in market values and the elimination of a surcharge on commercial properties. Expenses are also expected rise about $21 million, with payroll, pension contributions and money for schools going up.

The idea of raising the city's tax rate has come up during the last several weeks, including at city council budget workshops. Some council members said they would favor increasing the tax rate by a few mills, while others cautioned against the idea. A mill equals $1 for every $1,000 of assessed property value.

Segarra said last month that he and other city leaders have come up with cost-saving ideas, but that "it still doesn't get us where we need to be without a mill rate increase." He said at the time that the city could face an increase of 4 to 5 mills. The city's tax rate is currently 71.79 mills.

Panagore declined to say Thursday whether the mayor would raise the tax rate in his proposed budget.

Segarra could not be reached for further comment Friday.

Panagore said the city is also exploring ways of seeking new revenue, including the sale of city-owned property, toughening the penalties for those who violate blight ordinances and implementing a voluntary payment in lieu of taxes program.

The city is expecting to take in at least $1 million from institutions like churches, hospitals and nonprofit and charitable organizations through the PILOT program, Panagore said.

He added that the mayor probably would not draw from the city's rainy day fund, which currently has a balance of $23.5 million, to help close the deficit.

"It's not our intent to start off the year raiding those funds," Panagore said. "The funds are there for when accidents happen."

After the mayor releases his proposed budget, the city council will have the opportunity to amend it. The city's deadline to adopt a budget is May 31.