Regionalism Can No Longer Be Brushed Aside In Connecticut

Regionalism Can No Longer Be Brushed Aside In Connecticut

Hartford Business Journal

October 26, 2017

By Greg Bordonaro

Imagine a Connecticut in which home rule wasn't ingrained in our culture and West Hartford, Hartford and East Hartford were combined into one city.

Three local governing bodies could be folded into one, allowing the municipalities to share resources, cut back-office and overhead costs, consolidate schools and act more cohesively in promoting economic development.

Would such a fundamental shift help solve Hartford's fiscal crisis and lead to a more prosperous future for the Greater Hartford region?

We'll likely never know because municipal mergers are largely unheard of in Connecticut and the likelihood of Hartford's neighbors agreeing to absorb the Capital City's fiscal problems is slim to none.

But it's a useful exercise to re-think the way Connecticut ought to be governed in light of its ongoing fiscal crisis, which will likely haunt the state for years to come, threatening funding to cities and towns that have few options to raise new revenues other than to increase property taxes.

Indeed, municipalities, up until this year, have largely been shielded from major funding cuts as state government has been forced to rein in expenses and raise taxes to make ends meet.

That, however, has begun to change, and rightfully so. With the state operating under Gov. Dannel P. Malloy's executive order since July 1, hundreds of millions of dollars in local aid has been withheld, leading Moody's Investor Service last week to assign negative outlooks to, or place under review for downgrade, the credit ratings of 51 cities and towns.

Even if lawmakers restore most local government funding this year, which they appear closer to doing, future deficits likely await.

Municipal aid back to top

Few realize it, but municipal aid is the single largest state expenditure, accounting for about a quarter, or more than $5 billion, of the annual state budget, according to Malloy's office. Most of that money funds education ($4.1 billion) while the rest underwrites local governments. Lawmakers have little choice but to trim some of that spending if they want to avoid more statewide tax hikes.

That's why the prospects of municipal consolidation or mandatory cost sharing must be brought to the forefront of the conversation. In this week's issue, Hartford Business Journal News Editor Matt Pilon explored the topic. He found some local governments or public officials interested in a potential merger, including a selectman in Durham and the cash-strapped town of Scotland.

Will the mergers happen? Most likely not. It's a tough sell politically and the legal hurdles — it would require the approval of town governments as well as a special act from the General Assembly — are many.

But while taxpayers complain about the inefficiencies at the state level, we must also keep a sharp eye on how local governments are spending money. And, like the state, many cities and towns are hamstrung by union contracts.

The state's Regional Performance Incentive Program provides baby carrot incentives for communities to regionalize services, but a stick approach must be adopted if we are going to truly change the cost structures of municipal governments.

Tie local aid to certain cost-saving/cost-sharing metrics and don't allow towns to collectively bargain away their ability to regionalize services. That's a start.

In some cases, a merger may make practical sense, even if it's not politically feasible. Take the West Hartford-Hartford-East Hartford case as an example. Hartford's fiscal crisis has been brought on by myriad factors including mismanagement by past administrations (the publicly financed minor league baseball stadium, for example, was a financial boondoggle, even though the end product has brought a new sense of vibrancy to downtown).

But the Capital City, in many ways, has been set up to fail. That's the clarion call Mayor Luke Bronin has echoed since he was sworn into office in 2016.

Consider this: Hartford has a population of around 123,000, or about double the number of residents in neighboring West Hartford. Yet, West Hartford has more land (22 square miles vs. Hartford's 17 square miles) and a much larger property tax base to draw from (West Hartford's grand list was $6.2 billion in fiscal 2016 vs. $4.1 billion in Hartford).

Meantime, Hartford's 74.29 commercial mill rate (vs. West Hartford's 41.04 mill rate) makes it impossible to spur private development without government subsidies. Add in the fact that more than 50 percent of property in Hartford is tax exempt because it's home to many government, college and nonprofit entities, and it's not difficult to see why the Capital City is on the brink of bankruptcy.

Yes, Hartford receives hundreds of millions of dollars annually in state aid, but a vibrant city can't depend on the whims of state government, which has its own dire fiscal crisis.

If Greater Hartford and the state as a whole don't start to think regionally in more substantive ways, our fiscal and economic woes will continue.