Wednesday, July 18, 2018

Hartford City Council Unanimously Approves Bailout

BRENDAN CLARK ’20

NEWS EDITOR

In an agreement reached this past week, the Hartford City Council voted unanimously to approve final terms for a bailout agreement with the State of Connecticut. The agreement, which would pay off Hartford’s $550 million dollars in general obligation debt, would be completed over the course of 20 years according to an article in The Hartford Courant last Monday, Mar. 26.

The payments would begin as early as last week according to the Courant, with $12 million dollars being paid out by the end of the fiscal year, June 30. Council President Glendowlyn Thames commented to the Courant that while this is “not a silver bullet,” the deal is a recognition from the state that “we do not want our capital city going into bankruptcy.”

The bailout is the result of a myriad of factors, including the lack of taxable land, which was cited as one factor in Hartford Mayor Luke Bronin’s threat to seek Chapter 9 bankruptcy protection last fall, added the Courant. The approved deal is coupled with the state budget which provided Hartford with additional funding. The deal also stipulates that Hartford must refinance to lower its annual debt contributions to below $40 million, a decrease from the previous projected high of $56 million.

Mr. Bronin remained optimistic, adding to the Courant that “we can see a path to balanced budgets for the next five years.” As a result of accepting extra funding, Hartford was placed under the purview of the state in January as well.

However, despite this optimism, Republican legislators were upset on Wednesday, Mar. 28 over the decision and urged officials not to sign the agreement under threat of rescinding funding. The Courant quoted a letter from Senate Republican Leader Len Fasano and House Minority Leader Themis Klarides which said that the intent of the agreement was to “provide Hartford two years of additional financial assistance,” not to “vote to pay off more than $500 million in Hartford’s debt over a period of 20 years.”

Office of Policy and Management Secretary Ben Barnes conceded that “I appreciate that they may not like the way we executed the agreement … but they really did pass this law,” he said. “They wrote it, they passed it, they negotiated it amongst themselves. If they are unhappy with the outcome, they should look in the mirror,” according to the Courant.

Mr. Bronin also responded, concluding that “they [Republican leaders] should have the courage to call for our capital city to file bankruptcy, because that’s the only responsible long-term alternative,” according to the Courant.

Mr. Bronin, State Treasurer Denise Nappier, and Mr. Barnes signed the deal on Wednesday, Mar. 28, according to the Courant.

This story was originally run in two separate articles by The Hartford Courant, one on Mar. 26 and one on Mar. 28, both by Jenna Carlesso. This story also appeared in an article circulated by the Associated Press

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