Hartford Business Journal

14 Hartford Business Journal • June 24, 2019 • www.HartfordBusiness.com SPECIAL REPORT: CITIES PROJECT cut and across the U.S. — was going through major economic and demo- graphic shifts as more people moved to the suburbs. That squeezed out a large portion of Hartford's middle class, and the affluence that went along with it. The city's manufacturing and indus- trial base also began to shrink, while its impoverished populace grew, leading to higher city-government costs. As taxes rose to compensate, more properties also shifted to nonprofit ownership. That came on top of the enormous share of city property already owned by tax-exempt institu- tions like colleges, hospitals, sewage plants and even the state itself. Over the past half-century, the por- tion of Hartford's tax-exempt grand list has more than doubled. State government reimburses the city for some of its tax-exempt property, but it doesn't come close to filling the gap. City government, too, has exacer- bated the problem over the decades by overborrowing, making pension promises whose costs have outpaced grand-list growth, and then kicking the can down the road either through short-term and costly debt restructur- ings or by raising taxes. However, Bronin, who is running for reelection this year, said much larger structural issues have been the lead- ing cause of Hartford's fiscal stress. "At the root of the problem is the fun- damental flaw of having an 18-square mile city with an enormous concentra- tion of non-taxable property and intense concentration of poverty and asking that city to run itself on only one local source of revenue," he said, referring to the fact that mu- nicipalities in Con- necticut are only allowed to raise revenue through the property tax (in addition to permit and other fees). "The biggest problem is that you have a city built on the tax base of a sub- urb. That, from the start, is a structural flaw that has all kinds of consequences." Bronin said his administration is running a "very lean government" and has made deep cuts over the last few years. The city council just passed the mayor's $573.2 million budget for By Greg Bordonaro gbordonaro@hartfordbusiness.com O f the $7.1 billion of assessed real estate within the city of Hartford's tightly confined borders, 59 percent of it is untaxed because its owners are nonprofits or other tax-exempt entities, according to a Hartford Business Journal data analysis of the city's 2018 grand list. It's an issue city officials have long decried as a significant contributor to Hartford's financial woes, limiting the property base from which it can extract tax revenues. For the total grand list, when factoring in commercial personal- property and motor vehicles, the tax- exempt ratio lowers to 51 percent. Of the approximately $4.2 billion in tax-exempt real estate on Hartford's 2018 grand list, the city owns nearly 26 percent of it, including hundreds of par- cels with a combined assessed value of just over $1 billion, HBJ's analysis found. That tally includes only city-owned real estate — schools, parks, firehous- es, public-safety and public-works complexes, city hall, plus sundry resi- dential and commercial parcels seized in lieu of back taxes. Besides the city, the state is a major Percentage of tax-exempt property in Hartford The percentage of tax-exempt property in this chart includes both real estate and personal property that is non-taxable because it is owned by not-for-profit institutions or federal, state and local governments. How much Hartford real estate is tax exempt? The percentage is higher than you think Source: Manhattan Institute 1967 1977 1987 1997 2007 2018 0% 10% 20% 30% 40% 50% 60% % of tax-exempt properties Year >> Broken System continued State Rep. Jason Rojas, (D-East Hartford) Hartford Mayor Luke Bronin said there is no clear path to lowering the city's mill rate in the near term. PHOTO | HBJ FILE

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