Keeping Hartford out of bankruptcy will involve a collaborative effort, Connecticut Gov. Dannel Malloy said in New York on Wednesday.
“We have to do something, they have to do something,” Malloy told a told a Municipal Forum luncheon gathering in Midtown. “I’d prefer we avoid bankruptcy, but I’m not sure that can be done. It can’t be done unless people come to the table.”
Hartford one day earlier received its latest downgrade as S&P Global Ratings lowered its general obligation rating on the city’s bonds two notches to junk-level BB from BBB-minus. Moody’s Investors Service already pegged Hartford down to junk, at Ba2.
“I think Hartford has some problems it has to tend to itself,” said Malloy, a Democrat who took office in 2011 and will not seek re-election next year.
Malloy compared the city’s attempts to extract concessions from several labor unions to the state’s. His administration last month signed a tentative contract with leaders of state employee unions that he said would help create “significant, long-term structural reforms” to pension and benefit costs.
He also referenced his State of the State speech in January, in which he called for a fairer distribution of aid to municipalities. “But we also have to hold them responsible.”
Mayor Luke Bronin has repeatedly called on the state legislature, labor and bondholders to collaborate over Hartford. “This is the time to come together to support a true, far-sighted restructuring,” Bronin said in a statement Tuesday night.
The city last week hired Greenberg Traurig LLP as bankruptcy counsel.
Bronin’s request for an additional $40 million in state aid has stalled along with the state budget process itself. Malloy has been running the state by executive order with the governor and lawmakers stalled over his proposed $39 billion biennial budget for fiscal 2018 and 2019.
The capital markets have pummeled Hartford over the past year. That prompted some bond analysts to question whether the rating agencies should have red-flagged the city sooner.
“Quite frankly, this marketplace has been very generous to Hartford, in retrospect,” said Malloy.
Connecticut, according to the governor, has generally turned its back on its urban environments.
“Hartford, New Haven, Bridgeport and Waterbury have not benefited from the kinds of growth and rebirth that we’ve seen in other states, and quite frankly, what we experienced in Stamford,” said Malloy, a Stamford mayor before his election as governor.
“Connecticut has stopped investing in infrastructure over the past 30 years, and stopped investing in its educational systems generally.”