Open questions linger as the fiscal drama in Connecticut and capital city Hartford continues.

Some details of a tentative state budget compromise leaked out Thursday, with cigarette taxes, a levy on public schoolteachers and a phase-out of the property tax on motor vehicles in play.

Connecticut has operated without a budget since July 1, with Malloy running the state by executive order.

It's uncertain whether Gov. Dannel Malloy, who said he has yet has yet to see any plan, would support it; what would ultimately plug a huge biennial deficit, and whether enough is in the package to help pull Hartford off the bankruptcy ledge.

"I'm hopeful this will lead to a budget agreement next week, hopefully by Friday," the governor said. "But in the absence of that, it will be difficult to celebrate."

Even legislative leaders admitted the bipartisan compromise bill is a work in progress.

"We all have caucuses that we have to speak to," said House Speaker Joe Aresimowicz, D-Berlin.

Also Thursday, while Hartford officials sponsored their own symposium on bankruptcy, Moody's Investors Service said it expects the city to default on its debt as early as November.

Mayor Luke Bronin has said as much over the past few months.

"The city is likely to either default, declare Chapter 9 bankruptcy, or both without additional concessions from the state of Connecticut, bondholders and labor unions," Moody's said. "How and when the concessions are realized will factor into bondholder recovery as well as the city’s financial recovery."

Bronin over the summer hired law firm Greenberg Traurig LLP in the summer to weigh restructuring options.

"Moody’s report highlights, once again, why we have talked so transparently about the need for structural change to address Hartford’s structural challenge," Bronin said Thursday night,

Bronin, predictably, spoke cautiously about the tentative budget deal and reiterated that state aid is but one step.

"My understanding is that the agreement includes a framework that may allow the state to partner with the city in a sustained way," he said. "That said, any adequate and sustainable solution is going to require the partnership and participation of all of our stakeholders.”

Hartford's bonds are deep into junk. Moody's rates the city's general obligation bonds Caa3 while S&P Global Ratings assigns a CC rating.

The Moody's analysis projects annual operating deficits that range from $60 million to $80 million annually through 2036. "The city’s high fixed costs are largely driving these deficits as they represent 23% of the fiscal 2018 budget."

Hartford has roughly $604 million in general obligation and lease debt, according to Moody's.

The city hosted two bankruptcy symposiums, one at the Society Room downtown, the other at Hartford Public High School. Speakers included Kevyn Orr, the emergency manager for Detroit during its stay in bankruptcy, and James Diossa, mayor of Central Falls, R.I, which emerged from bankruptcy in 2012.

Insurers Assured Guaranty and Build America Mutual wrap about 80% of the city's outstanding bonds.

"Hartford does not face the same challenges as Detroit or Central Falls, R.I.," said Build America Mutual chief credit officer Suzanne Finnegan. "Unfortunately, their choice to focus on the supposed 'benefits' of bankruptcy overlooks successful turnarounds in Harrisburg, Pa., Waterbury, Conn., and many other cities that were achieved without a bankruptcy filing."

The bond insurers recently hired financial advisor Robert Lamb, founder and president of Fairfield, N.J.-based Lamont Financial Services Corp., to help find solutions for Hartford.

A key milepost for Hartford is Oct. 31, when the city has a $26.9 million short-term tax anticipation note due. Its next debt-service payment is due Nov. 15.

According to Moody's assistant vice president Nicholas Lehman, fixed costs, including pension contributions, benefits and insurance, and debt service, are driving large projected operating deficits of about 11% of revenues.

"For at least a year, the city of Hartford has made clear the depth of the city's financial crisis," Bronin told bondholders during a recent conference call. "The city's fiscal crisis cannot be resolved responsibly at the local level alone."

Bronin would need Malloy's approval to file bankruptcy.

"I would not be surprised if the mayor sends that letter off, and I hope he would call me the day before it happens," state budget director Benjamin Barnes said in New York last Friday.

Not counting fire district or other similar taxes, Hartford has Connecticut's highest mill rate at 74.29 followed by Waterbury at 58.22 and New Britain at 49.

As Hartford looks to bondholders, options for restructuring include refinancing debt by issuing new refunding bonds with a maximum maturity of 30 years, instead of the previous cap of 20 years. A statutory lien on property taxes would secure the new bonds.

"In the event of a default, bondholder recovery is extremely sensitive to the amount of concessions received from stakeholders, and how those concessions are allocated," said Moody's. "Bondholder recovery analysis supports the Caa3 rating based on Moody’s expectation the state and labor unions will provide significant concessions."

Moody's also said an additional $50 million in state aid, equal to or fully funding the payment-in-lieu-of-taxes formula, would significantly enhance revenues, and that unions constrain meaningful labor spending cuts.

“One option is the state fully funding the existing payments in lieu of taxes formula, which has been underfunded for years," said Moody's. "Fully funding the [PILOT] formula would provide the city with $52.3 million of additional revenue each year.”

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