🔒2016: A year of state, city financial crises

This is our last regular issue in 2016, which has been another roller-coaster year for Greater Hartford and the state of Connecticut. While we saw some progress in parts of the state's economy, it proved to be another tough year dominated by fiscal stress and uncertainty.

Here is the good, bad and ugly of 2016.

Good

Connecticut started off the year relatively strong with job gains in the first four months of 2016, adding just over 9,500 jobs from January through April. That forward momentum, however, didn't last and the state lost jobs in five out of the last six months.

Meantime, the state's unemployment rate started at 5.5 percent in January and stood at 5.1 percent in October.

The housing sector fared better this year, with home sales up 8.4 percent through the first 10 months of 2016, according to The Warren Group. Home prices, however, have remained sluggish, down 0.6 percent from 2015 to $248,000.

Another bright spot is that state lawmakers, despite facing another billion-dollar deficit, didn't raise taxes this year, instead choosing to cut expenses and the state workforce. While the cuts were painful, affecting social services for some of the state's neediest residents and causing some government employees to lose their jobs, they were needed to prevent a third wave of tax hikes in the last six years.

Bad

While tax increases were avoided in 2016, it remains to be seen if the same can happen in the year ahead. Nonpartisan budget analysts have forecasted a deficit as high $1.5 billion in fiscal 2018. That comes despite the state slashing more than $800 million in spending this fiscal year and laying off over 1,000 state workers.

Connecticut's lack of economic growth and spiraling long-term debt costs have created a vicious cycle of fiscal instability with no end in sight.

Further tax increases would continue to scare off business investment while more budget cuts will begin to eat into vital state services. Gov. Dannel P. Malloy recently reached a deal with state labor unions to prevent long-term pension costs from overwhelming future state budgets, but more state-employee concessions (on wages, healthcare and pension benefits) must be achieved, if Connecticut wants to establish any form of stability.

Ugly

The year started off with much hope and optimism for the city of Hartford, with a young, energetic, bright new mayor taking office, but Luke Bronin's honeymoon period was largely nonexistent as he was forced to deal with multiple crises left by the prior administration.

First, Bronin inherited a deficit-laden budget that he said has Hartford headed toward insolvency unless drastic measures are taken by the state legislature to support the city. Poor financial stewardship by past administrations, a poverty-stricken population, huge swaths of untaxable land, and a high commercial property tax rate have sapped the city's ability to grow economically or keep up with rising municipal costs.

Then there was the disastrous Dunkin' Donuts Park project, which fell behind schedule and was over budget, forcing the Hartford Yard Goats to embarrassingly play its inaugural season entirely on the road. Bronin bravely fired the original developers, Centerplan Construction, but myriad costly lawsuits have ensued over the project.

As we look forward into 2017, it will likely be a make or break year for Hartford. If the city and state legislature can come up with a fair plan to save Hartford from bankruptcy, and the ballpark is ready for April 2017 opening day, the city can begin to repair its tattered image.

If both problems go unfixed, Hartford's outlook is cloudy at best.