An honest budget, for a change, with many seeing a tax cut
Published 4:27 pm, Monday, April 25, 2016
Last year when I ran for Mayor, I noted how the prior administration raised property taxes year after year, except during an election year. I pledged to do whatever I could to reduce the property tax burden on Bridgeport. I have done it before, balancing the city’s budget with no tax increase for 10 years in a row.
But before you can make new tax policy for the city, years of governing experience have taught me that you must present an honest budget. Sadly, the budget my administration inherited halfway through the fiscal year was not honest. Bridgeport is now paying the price for it.
When we took office last December, the Finch administration told us the city’s budget was balanced. Instead, we found a $20 million dollar deficit — the result of vast overestimation of revenue while not budgeting major expenses, some of which were required by law.
More than $7.5 million in required pension payments for police and firemen were never budgeted.
$2.4 million in salary increases (paid in part to Finch and his top level staff the day they left office) were not budgeted.
City revenues were overstated by $5.6 million.
There was double counting of nearly $900,000 in state aid.
Overtime for police, fire and public facilities employees was under-budgeted by $8 million.
Presenting an election year budget, the last administration told Bridgeport taxpayers they only needed to collect $292 million in property taxes to fund city services. This shorted their own spending plan by at least $20 million dollars in order to keep the mil rate on properties artificially low.
The actual spending in the Finch budget required $312 million in property taxes to be balanced. If they had proposed an honest budget, their mil rate would have been higher.
Unlike the last administration, the budget I have presented to the Bridgeport City Council is honest. We actually cut city spending by $5 million from $312 million to $307 million.
We have reduced the city’s budget through some of the following measures:
Reducing interest payments by $3.5 million with the refinancing of millions of dollars of city debt.
Instituting a city spending freeze, saving more than $2,000,000.
Reducing the city workforce by approximately 80 employees.
Instituting unpaid furloughs for some employees, and negotiating with city unions concessions to save millions and avoid further layoffs.
Aggressively collecting hundreds of thousands of dollars owed to the city from vendors and other businesses.
This year, Bridgeport is implementing property revaluation. This is meant to make the tax burden fairer across the board and more accurate relative to current property values. The revaluation of Bridgeport properties was supposed to take place in 2013, but was delayed for two years by the Finch administration until after the election. Under state law this revaluation could not be delayed again.
This reassessment of city properties is the first since 2008 when the housing market was at its peak, and has resulted in a net loss of more than $1.1 billion from our Grand List. In order to yield the same amount of tax revenue for the city, the mil rate will almost certainly increase. However, this does not mean an increase in taxes for all residents. Instead, depending on new property values, some will see a property tax increase, while many others will see a decrease.
The city’s finance office estimates that up to 60 percent of Bridgeport residential homeowners will actually see an overall tax cut, not an increase as claimed by some. The reason for this is in part that property values, and thus the property tax burden, have shifted away from residential properties toward commercial properties.
Additionally, thanks to the hard work of the Bridgeport legislative delegation and state House and Senate leaders, everyone who owns a car in Bridgeport will see a 10-mil reduction in their car taxes. As a state-wide capped 32 mil rate on cars is set to become law in Connecticut, and that will result in an almost 25 percent reduction in motor vehicle taxes in Bridgeport —from 42 to 32 mils.
Unfortunately, this item is at the center of the budget battle at our state capitol in Hartford. Our municipal budget depends heavily on what level of state aid we receive.
With state lawmakers looking to close a $1 billion deficit and the governor laying off thousands of state workers, Bridgeport could lose up to $10 million in state aid.
This would force my administration to re-write the budget, slash critical services and potentially raise taxes to balance the books. I hope this doesn’t come to pass and I’m working closely with our legislative delegation and House and Senate leadership to prevent this devastating scenario.
Despite our challenges, the budget I propose is honest and looks to reduce the tax burden, while still making a commitment to fund essential services and public safely. This budget will allow us to generate the economic growth that our city needs and unlock Bridgeport’s great potential.
Joe Ganim is in his sixth term as Mayor of Bridgeport.