Connecticut Cities and Towns Join Hands to Stave Off Hartford Bankruptcy Threat

by San Antonio Attorney

In an inspiring show of force, Connecticut cities and towns are now united in a regional approach to help save Hartford City from an impending bankruptcy.

In a statement to Fox 61 last Monday, Hartford Mayor Luke Bonin stressed his preference for averting a possible Chapter 9 filing, but admits that the city’s excessive reliance on property taxes as the primary source of local revenue has made the situation extremely hard.

According to Bonin, Hartford does not have assets that can be liquidated. Essentially, the city only has a lot smaller number of assets in comparison to other cities and towns.

The slump has affected the delivery of social services in the city. The first-term Mayor recognizes the city’s $50 million budget deficit has had a huge impact on the delivery of basic social services to city residents, a situation that could deteriorate further if the city gets slapped with another $50 million shortfall next year. However, Bonin remains firm in avoiding spending cuts or increasing taxes to address the shortage.

On the other hand, Connecticut Conference of Municipalities member Kevin Maloney remains optimistic, saying that Hartford’s impending bankruptcy can be avoided by taking what he calls a “regional approach” to the problem.  In line with this, a board of leaders from surrounding cities like New Haven, Bridgeport, Waterbury, as well as nearby suburban towns has already been convened. The panel is set to convene once a month to iron out the implementation of the proposed regional approach.

Chapter 9 refers to a bankruptcy option that protects struggling towns or cities from ruin via a recovery plan jointly formulated by the town and its creditors. This plan outlines ways on how to help the town settle its existing financial obligations, while preventing the creditor from forcibly liquidating a struggling town’s assets.

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