No one wants the city of Hartford to declare bankruptcy. Still, it’s an option that -- given the depth of the capital city’s financial distress -- is on the table. But should the city eventually decide think bankruptcy is the only viable option, it would first have to get the governor’s consent.
It’s been 25 years since Bridgeport filed for bankruptcy against the wishes of state government, and 25 years since a federal bankruptcy judge rejected the move. But the event itself cost a lot of money, and was something state leaders at the time wanted to avoid repeating.
“One city goes bankrupt, then another city -- the ratings of the various cities go down because the cities are involved in underwriting debt and standing by that," said Stan Twardy, who was chief of staff to then-Governor Lowell Weicker at the time.
"But it then also falls upon the state, too," said Twardy. "There’s a sort of a domino effect with the bankruptcy of a city throughout the region and, ultimately, the state.”
So, not long after, the state passed a law mandating that no town could do what Bridgeport did and go it alone. The result was to mandate the governor’s consent. Twardy said that still makes sense.
“There was a concern, indeed there were other towns that had indicated they were going to file bankruptcy, because that was the easier way out for towns to do so than to really make the tough decisions you need to do," he said.
Hartford Mayor Luke Bronin has repeatedly made the case that the city’s structural financial problems will need a major state fix. Absent that, he says, all options -- including bankruptcy -- are possible.
But Kevin Maloney, spokesman for the Connecticut Conference of Municipalities said that a Hartford bankruptcy would be a bad option.
“That can be a rather strong black mark on that city, the Connecticut economy overall,” Maloney said.
Bronin declined to talk about the process of getting the governor's consent. In a statement, the office of Governor Dannel Malloy said that he and Hartford officials have had a number of productive conversations about the city’s finances and viable paths forward.
