Hartford, Connecticut is has some of the same problems facing Jackson. Joseph De Avila reported in the Wall Street Journal this week:
Hartford, Connecticut’s capital city and hub of the state’s insurance industry, is edging closer to joining a small club of American municipalities: those that have sought bankruptcy protection.
The city’s $49.6 million budget hole and the impending departure of one of its biggest employers, Aetna Inc., have shined a light on its unusual predicament: Half of the city’s properties are excluded from paying taxes because they are government entities, hospitals and universities.
It has less taxable property than the neighboring suburban community of West Hartford, which has less than half of the population than its urban neighbor. And Hartford’s total property-tax receipts are about 25% below that of the tony community of Greenwich.
“The root of the problem is you have a city built on a tax base of a suburb,” said Mayor Luke Bronin.
The mayor said the small tax base along with growing fixed costs produced structural budget deficits that prior administrations sought to deal with through asset sales, short-term debt restructuring and property-tax increases.
Mr. Bronin is now asking for financial help from the state. “My goal and my hope is that legislators from around the state of Connecticut will recognize that Hartford cannot responsibly solve a crisis of this magnitude at the local level alone,” he said.
Around the U.S. the main source of funding generated by municipalities is property-tax revenue, contributing 47% of the money raised by local governments, according to the Lincoln Institute of Land Policy.
For capital cities such as Hartford, much of the real estate is held by government departments that don’t pay taxes. Hartford, with a population of about 125,000, is home to the University of Connecticut School of Law, Trinity College, Hartford Seminary and the state Supreme Court.
Other cities in similar situations include Boston, where just over half of the property in the city is tax exempt. In Baltimore, about 32% of the property is tax exempt, and in Philadelphia it’s 27%.
While most U.S. cities are reporting healthy budget reserves that have returned to prerecession levels, Hartford is among a small but growing group of municipalities that are confronting rising levels of fiscal stress, according to Moody’s Investors Service.
Other areas grappling with long-term financial problems driven by poor revenue growth and rising fixed costs include Jackson, Miss., and Wayne County, Mich.
Only 64 bankruptcies have been filed by cities, counties, towns and villages since 1954, according to James Spiotto, an attorney who tracks municipalities’ bankruptcies. In 2013, Detroit became the largest-ever U.S. municipal bankruptcy case.
Victor Medeiros, a public-finance ratings analyst with S&P Global Ratings, which downgraded Hartford last month, said the city could face additional downgrades of several notches.
The credit-ratings firm will be watching whether Connecticut can reach a timely budget agreement and what level of financial assistance the state will be able to offer the city, he said.
Aetna and the other four biggest taxpayers in the city contribute nearly one-fifth of the city’s $280 million of property-tax revenue. Property-tax receipts make up nearly half of the city’s general-fund revenues.
Aetna, Hartford Financial Services Group Inc. and Travelers Cos. Inc., also Hartford’s biggest employers, have said they would collectively give the city a voluntary payout of $10 million annually over the next five years to help avoid bankruptcy. But the companies have said they want to see comprehensive changes that allows the city to stabilize its finances.
The bigger concerns “are getting the city turned around where we can attract private-sector investment here to ultimately begin to drive” property taxes down, said Oz Griebel, chief executive of MetroHartford Alliance, a regional business group.
Since 2000, Hartford has increased its property-tax, or millage, rate seven times. The rate is now more than 50% higher than it was in 1998.
At the current level, a Hartford resident who owns a home with an assessed value of $300,000 currently pays an annual tax bill of $22,287, at rate of 7.43%. A West Hartford homeowner with a similar house pays $11,853 at a rate of 3.95%.
The city must pay nearly $180 million on debt service, health care, pensions and other fixed costs in the coming fiscal year beginning July 1. That is more than half of the city’s budget, excluding education.
Mr. Bronin said one-time budget fixes and tax increases won’t cut it anymore. After cutting 15% of the city’s nonuniformed workforce, he said he won’t reduce the number of police officers or firefighters and added that further trimming of city services would be irresponsible.
Democratic Gov. Dannel Malloy last week said Hartford and the state Legislature would have to accept more oversight of the city’s finances in exchange for state assistance. “I do not support additional moneys going to our challenged urban environments without a review process,” Mr. Malloy said.
Connecticut House Majority Leader Matt Ritter, a Hartford Democrat, said everyone in the capital understands that it is in the state’s best interest to make sure the city has a sustainable future.
Bankruptcy “doesn’t just affect Hartford,” Mr. Ritter said. “It would affect neighboring communities, it would affect the state, it would probably affect our credit ratings.”
Thursday, June 8, 2017
Whither goes Hartford goes Jackson?
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23 comments:
They need to Free The Land! By Any Means Necessary!! Duh.
An effective property tax rate of 7.43% is beyond outrageous.
Dat property tax rate, tho!
Seven percent? Holy heck! What's funny is the suburban rate of over 3.5% is ridiculous also. Any rate over 2% is suspect, and would cause me to leave.
The Bonanza in Madison is much better than the one in Hartford.
The problem is the "tax exempt" status of all sorts of entities. It is not just government but also includes "religious institutions,' which should never be tax exempt. A tax exemption is the same as a subsidy and my tax dollar should bot be subsidizing insane Christians, Muslims, Jews, Hindus, or any other group. Have government and "religious" institutions pay taxes and most of the problems are gone.
If a City needs the money, it can tax "nonprofit" organizations including religious institutions. Jackson has spending and income problems. At this point in time it really does not matter. Jackson is dead,dead, dead and no one will buy bonds at any rate soon.
THere's another similiarity Hartford shares with Jackson. I guess it would be politically incorrect to point it out.
$22,000 a year could pay for a fine private school. But my guess is Hartford schools, like virtually all major city schools, are a disaster.
For that matter @6:58 we shouldn't have to shoulder the burden of carrying all the Tom, Dick and Harry non-profits that call Jackson home. Spend some time looking through the 990s and the scam becomes readily apparent. Far too many of those non-profits are nothing more than employment gigs that pay leadership oversized salaries and deliver few, if any, bonafide results beyond lip service and feel-good press releases.
Maybe Hartford should elect a mayor who is more concerned with taking real power for black and brown communities than fixing the roads and who hires advisors that refers to white business owners as the primary force of opposition.
@9:35
Hartford is very different from Jackson or many southeastern region cities. The city has many more white and diverse population and most people are not use to having 75% black populations in the Northeast. The schools are vastly different as well.
4:51 am Hartford's population of nearly 900000 is 15% African American and the next largest non-white population is 3% Asian. It is a bit over 76% white.
Those white business owners haven't prevented Hartford from having the same fiscal problems Jackson has.
Like Jackson, it has State owned government property, university property and hospital property. It doesn't have much in the way of undeveloped land like and neither does Jackson. So when even one major business leaves, it's a problem.
Like Jackson, it faces infrastructure problems and it's school buildings are old and high maintenance.
Unlike Jackson, Hartford doesn't have so many churches with substantial property .
Unlike Jackson, the people of Connecticut and thus their legislature understands that their capitol city and public education are important. So Hartford has 4 of the top rated schools in a state of good schools and the legislature will support the city in solving problems.
It seems that white leadership and crime rate doesn't prevent a capitol city from bankruptcy, but I knew few commenting here would want to face that .
Wikipedia says:
As of the census[59] of 2010, there were 124,775 people, 44,986 households, and 27,171 families residing in the city. The population density was 7,025.5 people per square mile (2,711.8/km²). There were 50,644 housing units at an average density of 2,926.5 per square mile (1,129.6/km²). The racial makeup of the city was 29.8% white, 38.7% African American or black, 0.6% Native American, 2.8% Asian, 0% Pacific Islander, 23.9% from other races, and 4.2% from two or more races. 43.4% of the population were Hispanic or Latino, chiefly of Puerto Rican origin.[60] Whites not of Latino background were 15.8% of the population in 2010,[61] down from 63.9% in 1970.[62]
6:34am....I agree that the race didn't matter. What matters is the political affiliation of those in charge of these disasters for the last 50 years or so. When was Jackson's last conservative or Republican mayor (not always the same thing)? Hartofrd's? Detroit's? Baltimore's? California's (major disaster looming)?
There is always a common thread of these failing municipalities....democrat/socialist control. Prove me wrong.
Please refrain from using logic or facts to win an argument. You will wind up hurting someone's feelings which is worse than a physical injury.
Which way to Montana or Idaho?
"This is why every time a business leaves it's such a big deal"......
Bingo
To top it all off the new Mayors Goon think it's a good idea to demonize the one group trying to attract businesses and/or simply keep them around. It's full of the white devil, ya know. All those black people are simply "Uncle Toms" that sold out, so they don't count.
I don't think Antar really believes this sh*t, but God knows his followers do. My favorite bs speech is the one about the "assault on black political power". We've got more black legislators than any other state (I think). The city council is mostly black. There are black mayors and alderman dotted throughout the State. Can someone please explain to me as to how black political power has been "assaulted" in Mississippi to date?
You can't really complain about Fox News or any other outlet when you yourself are trying to distort reality, and the narrative simply falls apart when you factor reality into the equation.
The finances of Jackson are comparable to that of Hartford, but everything else? Pfft.
The number of tax-exempt entities in Jackson hasn't increased much over the last 30 years, so you really can't blame them for the City's current financial crisis. The problem is the decimation of south and west Jackson (and increasingly, northeast Jackson) from an ad valorem tax standpoint. 10% of the city is now paying for 95% of the city's expenses, but the powers-that-be dictate that the city's revenues disproportionately go to the non-taxpaying wards. It's organized theft.
General-Purpose Local Government Bankruptcy Filings (9):
-- City of Hillview, Ky.
-- City of Detroit, Mich.
-- City of San Bernardino, Calif.
-- Town of Mammoth Lakes, Calf. (Dismissed)
-- City of Stockton, Calif.
-- Jefferson County, Ala.
-- City of Harrisburg, Pa. (Dismissed)
-- City of Central Falls, R.I.
-- Boise County, Idaho (Dismissed)
LAST UPDATED: Aug. 21, 2015
Get ready to see Jacktown on this list.
10:21am just described why socialism and government run/forced/mandated "charity" doesn't work. You can only make people pay for others poor behavior for so long. They leave as soon as they figure out they can. I sure as hell did. Good luck getting me to pay for the city leaderships' incompetence and to pay to babysit a bunch of delinquents whose parents could care less what happens to them. I think they try to call it school, but it sure as hell isn't.
The issue of tax-exempt properties is a real issue. While the number of entities hasn't necessarily grown, the presence of those things has. First Baptist Church, for example, has purchased several properties adjacent to their church building for parking, youth ministry, etc. Jackson State has bought or been gifted significant properties in the past decades.
Thirty years ago there was one of the largest grocery stores in the South on Ellis Avenue. Allstate Insurance maintained a large claims center on I-20. There was a large mall on Highway 80 and 220. Now those are all tax exempt properties, run by churches or government entities. Even things like Jackson Golf World get purchased by churches and become tax exempt.
But churches are small potatoes when compared to state government. The state fairgrounds sits on land that would be prime commercial or mixed-use real estate and would allow downtown to grow to I-55. The Memorial Stadium land could allow for expansion of Fondren and Midtown, but JSU would have to build a new stadium first, and even then the legislature is keen on making that space a full-time, parking lot for tax-exempt UMC.
Think about places like the R&D Center on Ridgewood Road, across from River Hills and Eastover. You have MPB, the State Library Commission, the Department of Wildlife and Fisheries and others on a location that would most certainly be developed into a taxable neighborhood similar to Petit Bois, Eastover, or Meadowbrook Highlands. When the MS Blind School property was given up, look at the development that followed.
Look, Jackson has its problems, not the least of which is a mayor with radical associates who have animus toward white business owners, but the tax-exempt property issue is real and the only way to address it is for the city administration and the state government to work together.
Looking at Phil and Tate on one side, and Antar and Kali on the other, that ain't happening.
What you seem to be missing, 12:43, is that NOBODY WANTS TO LIVE OR WORK IN JACKSON, ANYMORE, because of the HUMAN UNDERTOW. The People of Jackson are the problem. 'Downtown' is not itching to expand. Fondren and Midtown are struggling to fill the the areas they already occupy, and sure-as-hell do not need to "expand". Jackson is mostly VACANT LOTS, because there aren't enough people of substance to go around.
I'll repeat that. There are not enough competent, prudent, productive people in the Metro, to fill all the spaces competing for them, and for their Dollars.
And every time some Civil Rights jackass starts braying, or Guuuuuvurrrrrrnurrrr Feel Bouffant starts in with some Right Wing hate, another bunch of Mississippi's Best & Brightest head for Seattle and Denver, making the problem even worse.
Forget "Gentrification"! We're running out of Gentry.
@ 9:57am
"To top it all off the new Mayors Goon think it's a good idea to demonize the one group trying to attract businesses and/or simply keep them around. It's full of the white devil, ya know."
But that is the problem with a majority of cities across this country, whether in the north, south and out west.
People like new - even when its something they are already familiar with - like Target, Wal-Mart, Sam's Club, McDonalds, Wendy's, new homes, roads, bridges.
You take a suburb - throw some new homes, new pavement, fresh new gas stations - and people come running - because they like the aesthetics.
But what we do not consider, are the neighboring communities and how they will be affected.
So now, what smart metropolitan areas are doing is form coalitions and making agreements for complimentary growth.
When you look at the Jackson Metro area - we have three county's competing against each other, instead of complementing the area's growth.
Madison went and got Sam's, while Ridgeland is trying to get a Costco, while at the same time Jackson has lost 2 Sam's location in the last 20 years. That's not smart growth, that is just relocating.
Pearl opened up the Outlets of Mississippi, while the Outlet in Vicksburg had to close stores.
We need our cities within the metro to offer things that the other doesn't have. Don't just build for the sake of having something new, build to have something sustainable and that will benefit our area as a whole.
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