Hartford Mayor Eddie Perez recently proposed his budget for the upcoming fiscal year. I fully understand the difficulties associated with preparing a budget for a city like Hartford however the current budget will only worsen the vitality of the city. This budget is disastrous for property owners citywide. The $554.3 million dollar budget increases spending and property taxes. Another year of increased property taxes will continue to kill businesses in Hartford. Businesses across the city may be forced to close or relocate to the suburbs because of increased property taxes and the recession.
The tax increase will equal 3.85 mills (5 percent) which would bring the city’s mill rate to 76.64. This equals $76.64 for each $1,000 of assessed property value. Looking back at 2008 the city’s 72.79 mill rate was the highest in the state. As a point of comparison with the suburbs Avon had a mill rate of 23.41, Bloomfield 35.53, Rocky Hill 22.90, Windsor 28.34 and Wethersfield 30.68. In comparison to other urban areas Waterbury had a mill rate of 39.9202, New Haven 42.21 and Bridgeport 38.74. All of these figures are from the State of Connecticut’s Office of Policy and Management.
The major issue Hartford has every year when it prepares the budget that is never talked about is the amount of tax exempt property there is. I believe that one of the main reasons the city can’t properly balance its budget and maintain low property taxes is because so much property is tax exempt. On the upside Hartford is the capital and thus it houses numerous state agencies as well as the State Capital and Legislative Office Building which all together employ thousands. On the downside all state property is tax exempt. Since Hartford is the center of the greater Hartford region it houses most of the area’s major hospitals, places of worship, theaters and to some extent institutes of higher education. All of these places are tax exempt. Additionally, many new development projects were made possible by tax incentives. In return this leaves very little to tax and what is left to tax must be taxed to death (for lack of a better term) to keep the city afloat.
Tax increases are bad for property owners as well as renters. A majority of Hartford residents are renters. Increased property taxes could lead to more foreclosures. Downtown has already seen a massive wave of foreclosures and loan defaults. If a property owner loses their property and it is turned over to the bank it is my understanding that there is no law in place to force the bank to maintain the property while it is in foreclosure. This leaves renters residing in deteriorating buildings. Businesses who rent space could face the same fate.
Despite being hallmarks of the city there is really nothing keeping businesses in the city. In 2007 Paul Mozzicato one of the owners of Mozzicato-DePasquale Bakery on Franklin Avenue strongly came out against tax increases. Soon Mozzicato will be opening their first suburban bakery in Plainville. There was talk a few years ago that they would be opening a bakery in Wethersfield but that fell through. What is to keep Mozzicato from moving? What is to keep every business on Franklin Avenue or Albany Avenue or Farmington Avenue from moving over the border? Hartford is holding onto these businesses by threads when it should be holding onto them for dear life.
All of that being said I do not have many answers for Hartford. Overall the city must spend less. Some services must be cut and that will not be an easy process. Some city departments and agencies may need restructuring. I know big strides have already been made but more will have to be done.
I believe that all city employees should be mandated to live in the city. However I believe residency requirements are against the law in Connecticut and thus a state law would have to be overturned for the city to implement such requirements. In any case residency requirements would keep the salaries paid to city employees in the city. City employees who live in Hartford will be reinvesting their money here. If residency requirements can’t be overturned on the state level then their could be an incentive program for city employees to live in the city, however during these difficult economic times I do not think the city can afford any such incentive program.
And finally to wrap things up on somewhat of a different note I believe the city needs new young blood. Its needs young, involved, determined and dedicated individuals to work for it. How the city goes about doing that is a long and strenuous process and will have to wait for another post.
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