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Hartford Projects Budget Deficits This Year And Next

Steven Goode

February 25, 2011

In the first of six scheduled budget workshops, the city council learned Thursday that the city is on a pace for a $9.8 million budget deficit this year and a $17.8 million gap in 2011-12.

The city's $544.4 million budget for 2010-11 includes $285.8 million for schools, $250.7 million in municipal spending and $7.9 million for the Hartford Public Library. The city's chief operating officer, David Panagore, said he has asked all departments to keep spending at current levels for the next fiscal year.

Panagore told the council that he has a plan for dealing with this year's deficit. It includes an additional $1 million in tax collections, $600,000 in rent reimbursements from the pension commission and $500,000 from property sales and billboard rent from city property.

Panagore said the city is also expecting to save $3.6 million on benefits and pensions, $1.46 million from the early retirement incentive program, nearly $2 million in attrition, $500,000 in nonpersonnel-related reductions and $200,000 on debt service.

"These are conservative estimates so we don't overshoot and have to retrench," Panagore said.

Council member Larry Deutsch cautioned that any steps taken to close the deficit could raise other issues. "What are the consequences we face?" he asked.

Panagore's projections for 2011-12 showed a deficit of $17.8 million. If the deficit isn't closed, it would equal a 3.3 percent spending increase.

The major spending increases in 2011-12, according to Panagore, will be $9.8 million in benefits and insurance, $4.6 million in contractual increases and costs associated with public safety academies and $1.6 million each in debt service and non-operational costs.

Panagore said the city expects to raise an additional $6.4 million, or 4 percent, in taxes in 2011-12, with most of that coming from the phasing-in of the property revaluation. That revenue will be offset by a $1.5 million reduction in revenue from investments and property sales, a $1.4 million reduction in payments in lieu of taxes from the state and a $2.7 million reduction in state grants-in-aid.

Council member Corey Brinson noted that the city's budget had increased by nearly $100 million in the past five to six years as the city's population has remained stable or decreased slightly.

"Maybe we shouldn't be taking in $544 million and we could get some people moving back into the city," Brinson said.

Panagore also provided the council with an overview of the impact of Gov. Dannel P. Malloy's proposed budget, which projects a loss of $1.3 million and a $1.23 million revenue increase from additional local sales tax revenue. Overall, the city will lose about $72,000 under the governor's proposed budget.