Despite State Budget Stalemate – New Britain on Solid Ground

By at October 12, 2017 | 2:00 pm | Print

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The lack of a state budget is affecting many municipalities. In New Britain, officials said they started discussing the problems at the State level last fall.

“The administration took steps last year and early this year to mitigate a potential shortfall from the state in revenue to the City,” said Finance Director Lori Granato.

Under Governor Malloy’s Executive Order #58, which went into affect October 1, New Britain lost more than $12 million in various grant programs to the City. The Board of Education did receive its full share of Education Cost Sharing money.

Mayor Erin Stewart said her administration has taken many steps including city department heads being asked to determine what a 15 percent cut to their budgets would look like without impacting any services to the citizens.

Stewart also put a stop to all non-public safety infrastructure projects until further notice.

“It is not business as usual at the City,” said Mayor Stewart. “All purchase orders are being reviewed through my office in order to curb spending.”

The City also looked at ways to raise revenue. The City entered into a contract with Taxserv – a collections agency that will help collect old outstanding motor vehicle taxes.

In addition, the City’s Finance department said it has been looking under every rock for savings. Insiders tell the City Journal that financial officials have been meeting with the Mayor’s office weekly to monitor the spending of the City.

How has the City maintained cash flow to pay the bills when other communities are struggling?

The City Finance Director says, “Yes, some of our savings have come from debt restructuring; after careful consideration the City moved away from its long standing practice of issuing short term debt and took advantage of the currently low interest rates by bonding.”

Granato went on to explain, “think of your mortgage: when interest rates drop most homeowners will refinance to lower their current payments.” She said this allowed the City to better manage the principal payments which were coming due on the bonds.

The rating agencies consider this measure as proactive managing and not negative. In January 2016, the City received another bond rating upgrade, marking the fourth notch up in standards, allowing investors to see New Britain in a positive light.

“With unanimous approval by the City council, we were able to achieve significant savings not only on the recent refinancing but prior refinancing measures as well,” said Granato.

But, Granato said the crisis is not over yet.

“Capitol insiders say we can expect massive cuts in state aid over the next several years. What other choices do towns and cities have? Not many,” said Granato, “As fiduciary of the City’s funds, I believe that this Mayor, her Administration, and Council have taken appropriate steps to mitigate the shortfall form the state.”

One goal is that the unions and the Board of Education need to continue to work collaboratively toward the goal of keeping all necessary public and community services for residents.

It is unclear when a State budget will finally be passed, but in the meantime, Mayor Stewart said all she can do is keep providing services to the tax payers of her City and manage the day to day operations the best she knows how.

“My responsibility is to the residents of New Britain. We did not increase taxes this year and are staying the course by living within our means,” Stewart said. “At the end of the day, I am hopeful that there will be a bipartisan agreement that will keep cities whole.”

.News Feature

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