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Weathering the storm in Bridgeport.

It is like the calm following a storm. A resolute and gritty determination has set in among the palnners and decisionmakers in Bridgeport, Conn. The tumult and crisis of the largest municipal bankruptcy is past. Having withdrawn the petition, Mayor Joseph P. Ganim has submitted a new budget for the 1992-93 Fiscal Year.

"The budget is a balanced budget, balanced through a variety of sources and measures which will begin the process of fiscal recovery for this city." "The items employed to close this year's $33 million deficit," Ganim said, "are not one-shot revenues or savings, but will carry through year after year. To protect our taxpayers, we sought the cooperation of our municipal union members; we sought to gain the help promised by the State of Connecticut; we sought an entirely new way to operate municipal government and to provide services."

Operating under the scrutiny of a state-controlled financial review board, leaders in Bridgeport had to close a budget gap of $18.6 million for the previous year while drafting the financial plan for the new year. Mayon Ganim cited cost cutting measures that include spending freezes, furloughs and innovative methods of collecting delinquent taxes. A proposed mid-year tax increase offered by the previous administration was not part of the package.

The Budget Plan

* Department expenditure requests have been cut by $10 million

* Consolidation of some city departments and downsizing of city operations under reorganization plan has saved $1 million

* Changes in the city's health care costs and benefits through employee cooperaton has resulted in a savings of $8 million

* A reduction in deby service which will save $10 million

* A tax increase of 3.6 mills (approximately 5.5%) in the first year with no further tax increase proposed for the remainder of the three year plan

Bankruptcy Option

The city's current fiscal maneuvers exists in the context of the June 1991 Chapter 9 bankruptcy filing. The federal court ruled the Bridgeport had the right to reorganize its debts while continuing to provide essential municipal services and rejected a legal challenge by the state that filing for debt reorganization under federal bankruptcy law would violate the 10th Amendment to the U.S. Constitution.

In his ruling, Judge Alan H. W. Shiff wrote, "The restoration of the financial stability of a troubled city is precisely what Congress designed chapter 9 (the municipal bankruptcy chapter of the federal bankruptcy law) to accomplish ... chapter 9 provides a workable procedure so that a municipality of any size that has encountered financial difficulty may work with its creditors to adjust its debts."

Last week, the city of West Haven chose not to invoke bankruptcy provisions as it sought to avert default on a $17.3 million deficit. St ate officials worked to head off a repeat of their bankruptcy clash with Bridgeport by passing special legislation granting loan guarantees to West Haven in exchange for braod controls over the city's troubled finances.
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Title Annotation:fiscal crisis in Bridgeport, Connecticut
Author:Brookes, James
Publication:Nation's Cities Weekly
Date:Apr 20, 1992
Words:489
Previous Article:Innovative policies in L.A. and D.C.
Next Article:West Haven opts against bankruptcy.


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