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April 17, 2019

CT projected to pay $45.6M in Hartford debt aid in fiscal 2020

HBJ File Photo Connecticut state Capitol in Hartford.
By Joe Cooper

The state is projected to contribute $45.6 million to the Capital City in fiscal 2020 as part of its long-term commitment to pay off Hartford’s general obligation (GO) debt, according to the mayor’s proposed budget.

The debt payment projected in Mayor Luke Bronin’s 313-page 2019-2020 budget plan would be 5.4 percent less than the $48.2 million Connecticut taxpayers are expected to provide the city in the current fiscal year. In fiscal year 2018, the state kicked in over $31.1 million for debt payments and municipal restructuring.

Those payments are part of Connecticut’s commitment to pay off approximately $550 million of Hartford’s GO debt over the next 20 or so years.

If Connecticut were to fully fund the payment in lieu of taxes (PILOT) formula, which are grants that reimburse municipalities for a portion of revenue lost on tax-exempt properties, the city would receive an additional $68.9 million next fiscal year, a spokesman from the mayor’s office said Wednesday. Those properties include the Hartford 21 apartment tower, Hilton Hartford, Hartford Marriott Downtown and Trinity College, among others.

Still, Hartford is expected to make a $4.6 million debt payment next year on its new minor league ballpark, the budget says. The city generates about $1 million from its ballpark lease and a share of the Hartford Yard Goats’ non-baseball revenue.

The city’s budget and debt receipts, recorded as capital revenue, are subject to review by the Municipal Accountability Review Board (MARB), which was created to bailout Hartford and other cash-strapped municipalities.

To comply with its state partnership, the city regularly provides annual financial reports, monthly projections, cash flow analysis and future financial plans to the state.

By the end of the current fiscal year, the city -- excluding Hartford Stadium Authority revenue bonds -- will have approximately $694 million in total outstanding debt, Bronin’s budget says.

While opponents of the bailout argue Connecticut is in no financial shape to offer bailouts, there are signs of fiscal progress in the Capital City.

In March, Moody's Investors Service upgraded Hartford’s issuer ratings from B2 to B1 due to lean government spending and new cost-saving labor contracts, city officials say. The New York debt-ratings agency also maintained its A2 rating on Hartford’s GO bonds, and improved its outlook from stable to positive.

The improved debt ratings come almost two years after Bronin threatened a municipal bankruptcy filing if the city didn’t receive additional state aid.

“The city's consistency with this plan and recent bond rating upgrade demonstrates the continued progress to maintaining fiscal stability and focus to move from stability to strength,” the budget says.

Bronin’s $573.2 million recommended city budget for 2019-2020 does not include a tax increase or involve borrowed money. The plan also keeps the mill rate at 74.29, and the maximum mill rate for motor vehicles at 45.

This story has been updated

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