Based on preliminary forecasts, the City of Hartford anticipates a budget deficit of approximately $70 million dollars for FY13-14. The estimates were presented on Thursday night by the City’s Financial Director and Office of Management and Budget during the first Committee of the Whole (COW) meeting to address the FY13-14 budget. Per the City Charter, the budget must be approved by May 31st.
The biggest drivers of the deficit, accounting for about 50% of the overall increases, are pension and health insurance costs. On the pension side, the 2008 market crash created the need to increase the City's annual contribution to the MERF (Municipal Employees Retirement Fund). Next year’s increase for health insurance is $17.5 million and for pension it's $18.4 million.
According to the Connecticut Conference of Municipalities, the impact of Governor Malloy’s proposed budget on the Capital City would result in a revenue reduction of about $7.6 million due to the rolling of PILOT for State Owned Property into the ECS allocation, the elimination of the Municipal Revenue Sharing grant, and transfer of Pequot dollars into LoCIP, among other cuts. The car tax bill, if approved by the Legislature as proposed by the Governor, does not go into effect until FY14-15; however, it represents a future revenue shortfall of between $17 and 18.7 million dollars.
To mitigate the deficit, Mayor Segarra proposed several strategies including the continuation of wellness initiatives to offset escalating health insurance costs and pushing the sale of City owned properties.
“When I first took office we had a deficit of $33 million; last fiscal year it was $50 million and, as was done previously, I stand ready and prepared to close this gap,” said Segarra. “We have proven time and again that we are capable of doing more with less. While we continue working with our Legislative delegation and the Governor to craft a budget that doesn’t further hinder development in Connecticut’s Capital City, we have to find creative ways to grow the grand list, put more feet on the street and increase vibrancy and excitement in the downtown and throughout our neighborhoods.”
The next COW budget meeting will be held on Wednesday, March 6 at 6pm in City Hall.
