May 25, 2017
Connecticut is in the midst of a financial crisis. The decisions made now will determine whether our state returns to its former glory days, or whether it continues on its present path of job contraction and depopulation as young people and retirees flee. The first step in bringing back Connecticut is to allow Hartford to go bankrupt. This will send a message to other big spending municipalities and the state itself that the party is over.
Hartford has the highest mill rate of a municipality in the state, 74.29 (meaning a property owner pays $74.29 for every $1,000 of assessed property value) with no close second. Nonetheless, Mayor Luke Bronin’s proposed budget of 2017 has total expenditures of $560 million; but revenues fall $50 million short. The Mayor has proposed some cuts, but has failed thus far in his attempts to regionalize expenses or curtail union contracts. His political godfather, Governor Malloy, has proposed having the state chip in more money to cover this deficit.
But this is just the beginning. Hartford will pay over $70 million in 2017 to fund pensions and debt service. This will increase to $90 million in 2018 and continue to balloon. If fact, Hartford is $680 million in debt. The choice will be for Connecticut taxpayers to shovel more money into Hartford or cut essential services to a city where the average annual income is less than $30,000.
Yet Hartford continues to party on. They stole a minor league baseball team from New Britain, gave the owner a sweet heart deal on the lease, and blew $70 million constructing the stadium. The bus line from New Britain and the infamous Adrian’s landing are similar boondoggles. Yet Congressman John Larson wants to squander $10 billion on a “Big Dig” in Hartford and Governor Malloy wants to blow $250 million on the XL Center. Retirees are raking in six-figure annual pensions in their early fifties. With cost-of-living adjustments, the taxpayers will be paying these retirees over $200,000 annually when they reach their mid-seventies. And this does not include their Cadillac health care benefits. In fact, many municipal employees have union contracts that fix their pension on their final annual salary. Needless to say, this final salary is packed with overtime.
Only bankruptcy will stop this profligacy. The pensioners will have to take a hit but they won’t starve. The house near Del Ray Beach will just have two bathrooms instead of three. But the real beauty is when the bond holders (those who purchased Hartford’s debt) get clipped. Now no one will purchase bonds from other cities and the state. No more bus lines to nowhere. No more exorbitant pensions. And no more $200,000 payouts for “unused sick time.”
Critics will point out that allowing Hartford to go bankrupt will be an irreversible blow to the state’s prestige. The opposite is true. Bankruptcy will be the beginning of Hartford’s rejuvenation, as entrepreneurs and immigrants swoop in to buy houses and buildings at low prices without fear of confiscatory tax escalation. The millennials, who prefer urban living, will turn downtown into a mini Greenwich Village. Night clubs, coffee shops, folk song cafes, jazz clubs and exotic restaurants will spring up. Medical practices will return from the suburbs. The schools will improve. In fact, Detroit is experiencing such a Renaissance since it went through bankruptcy. It will be glorious.
But none of this will happen if the political hacks keep feasting at the trough. The best way to destroy a city is bomb it. The second best way is to tax it out of existence. That’s what destroyed Hartford.
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