🔒Time to turn attention to budget, Hartford’s fiscal woes

With election season now over, it's time for state lawmakers to put aside campaign rhetoric and start tackling key issues that threaten the future prosperity of Greater Hartford and the state as a whole.

Last week, state Democrats lost seats to Republicans giving them a slimmer majority in the House (79-72) and ending their full control of the Senate, which now has an equal number of members from both parties. That means Connecticut's Grand Old Party will have to shift its focus from screaming on the sidelines about policy changes to actually helping enact them.

We think a more divided government is a good thing for the state, which has failed to rectify its fiscal crisis under one-party rule for the last six years. As we head into January's legislative session, here are two major issues lawmakers must make top priorities.

Fiscal Stability

Connecticut once again faces billion-dollar deficits in the next two fiscal years, leaving legislators with few options when it comes to balancing the budget. Certainly, we can expect calls for tax increases on businesses and wealthy individuals, but they must be rejected.

Can Connecticut's most wealthy individuals and businesses afford to pay higher taxes to the state? The answer is probably yes, but another tax increase would do major harm to the state's business climate, which is already ranked among the worst in the nation by many polls.

Wealth and businesses, as we've learned, have become increasingly transient, attracted to locations that offer the best overall quality of life. Cost of living and doing business are major factors in that calculation. The constant threat of new and higher taxes in Connecticut is a major deterrent.

The state legislature has yet to enact sweeping structural changes to put Connecticut on a more even fiscal footing. Instead, they've tackled deficits by making emergency cuts to make ends meet for the moment, only to realize weeks or months later that an even larger budget gap looms in the future. This can't go on for much longer. We need a blueprint from one or both parties that balances the budget today, tomorrow and years from now.

Hartford’s Insolvency

We know many suburban residents have little sympathy for the city of Hartford's financial crisis, but they should. Yes, Hartford has been poorly managed in the past, but its troubles aren't all of its own doing.

As Mayor Luke Bronin has made clear in recent months, the health of Hartford directly impacts the health of the entire region. As Greater Hartford's main employment center, having a strong and vibrant Capital City — that attracts top companies and top talent — only stands to benefit the region as a whole, particularly as more young people are drawn to urban environments.

With the city staring down tens of millions of dollars in deficits in the coming years, bankruptcy is a real threat — one that state legislators should help the city avoid.

One way to help, is by fully reimbursing Hartford for its tax-exempt properties. As HBJ news editor Matt Pilon reports in this week's issue, more than 50 percent of property in Hartford is exempt from property taxes because it's owned by tax-exempt entities such as state government, colleges, hospitals or other nonprofits. The state reimburses the city for some of that lost revenue, but not as much as its statutorily required.

If the state fully funds its payment in lieu of taxes program, it would give the city another $50 million in annual funding, which would help to close deficits.

We think lawmakers should work to make Hartford — and other cities with significant tax-exempt properties — whole, but also attach strings to the extra funding, requiring the city to make structural budget reforms and rein in spending, particularly on union contracts.