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Hartford Adopts $540 Million Budget; Residential Properties Will See Tax Decrease

By JENNA CARLESSO

May 29, 2012

HARTFORD —— The city council on Tuesday adopted a $540.3 million spending plan for the 2012-13 fiscal year that raises the city's tax rate by 2.5 mills.

The approved budget, the result of lengthy negotiations between council members and city administrators, reduces spending by more than $6 million over Mayor Pedro Segarra's original proposal.

Although the tax rate will increase, council members have pointed out, taxes on residential properties will still go down by an average of 6.4 percent. Two housing sectors will have tax increases: four-family homes, which will go up 65 percent, and apartments, which will increase by 14.2 percent.

City council President Shawn Wooden said the last few weeks were "very labor intensive."

"Without question, it was a difficult and challenging process," he said Tuesday. "This was certainly one of the most difficult budgets to put together for the city in recent years."

Wooden praised the council for helping ease the burden on city taxpayers. Segarra had suggested a tax rate increase of about 4.3 mills, but the council reduced that number by cutting spending. A mill equals $1 for every $1,000 of assessed property.

"That we only increased the mill rate by 2.5 mills, I think that's a great accomplishment," Wooden said. "I think we made a good down payment on where we need to move toward fiscally, and but there's still more work we can do."

The council earlier this month cut more than $6 million from Segarra's original budget proposal after the state legislature failed to pass a bill that would have allowed the city to raise the assessment ratio for apartment properties, enabling officials to collect more property taxes. The city was left with an $8 million revenue shortfall.

The cuts, some of which were suggested by Segarra, included a $1 million reduction in expected health care claims, the entire $150,000 budgeted for the innovation fund, $80,000 for lobbyists and the city council's $300,000 community contributions fund, which members have used to fund pet projects over the years.

The council also approved a proposal by Segarra that builds an additional $3 million into the budget. The added revenue comes from a projected $1 million increase in property tax lien sales, $575,000 in building permit fees and $1.4 million in intergovernmental revenues related to school construction reimbursements, tax abatements and other areas.

Councilman Luis Cotto, a member of the Working Families Party, called the process "disconcerting."

"I think it could have been more open. People have more faith in government when they think it's working, and working right," Cotto said, adding that many of the budget amendments were worked out through "backroom deals."

"There are five new people [on the council], and they're going to think this is the way to do things," he said. "Backroom deals are the easiest way to go; being transparent is very hard. But I think now we have to take that extra step."

The adopted budget calls for the city to contribute $20 million to its municipal employees' retirement fund. In addition to that contribution, Segarra and the city's pension commission have drawn up a memorandum of understanding mandating that the city contribute $11 million more to the pension fund during the next fiscal year, bringing the overall contribution to $31 million.

Segarra could not be reached for comment Tuesday.