Bridgeport Mayor Sends Out SOS

Leader of struggling Connecticut city threatens bankruptcy, gets attention but no help. MUNICIPAL DESTITUTION

MARY MORAN, mayor of this financially strapped city, had had it. Two weeks ago, final negotiations with the city's unions over concessions proved futile. And her last-ditch plea to Gov. Lowell Weicker for more help from the state brought back a terse, ``Just raise taxes.'' As Mayor Moran saw it, there was nowhere to turn. Raising the already-highest property tax in the state yet again was untenable. So, in a move that has been characterized as both publicity-driven and a cry for help, she filed for protection under Chapter 9 of the US Bankruptcy Code.

Experts say it could be the largest municipal bankruptcy case in United States history. The state attorney general is filing a motion to dismiss the proceedings, arguing that the petition is illegal. Whether or not the petition actually gets to court, Moran's action has generated national interest in the plight of cities that are being forced in a time of recession to carry out state mandates without state funding.

While some experts see Bridgeport's problems stemming from the Reagan-era shifting of responsibilities from the federal to the state level, officials cite the 250 unfunded state mandates, including education requirements, a recycling program, and welfare costs of $6 billion.

Moran says only 7 percent of the budget is under her control.

``[The petition] is an extreme statement by the city that they don't see a way out as a consequence of the economy and realignment of responsibilities under federal and state policies,'' says Randy Arndt, spokesman for the National League of Cities. He says that while Washington is concerned about bailing out banks, it's doing little to save the cities.

Others lay part of the blame on wealthy Fairfield County suburbs that surround Bridgeport.

``It's the classic problem cities all over have,'' says David Carson, president of People's Bank. ``Surrounding towns benefit from the city's jobs, but pay nothing.''

Robert Pelton, curator of the Barnum Museum and a lifelong resident of Bridgeport, says: ``There are 169 cities and towns in Connecticut. Probably eight or nine of them have affordable housing.''

Mayor Moran's announcement caused confusion in the city. For several days afterwards, drug stores refused to fill prescriptions for welfare recipients and banks refused to cash checks for city workers. But Moran says she's found support for her position from lawmakers, businessmen, and citizens.

``It was the only thing she could have done,'' says Tim Morris, ringing up tools in Madison Hardware. ``Everyone before her swept it under the rug.''

Bridgeport is geographically small (15 square miles), but it has the largest population in the state and is loaded with big-city problems. It has a seedy downtown, rusting closed factories, and one of the worst public housing projects in the country.

Once the city thrived with the manufacture of armaments and Singer sewing machines. During World War II Bridgeport was called ``The Arsenal of Democracy.''

But after the war much manufacturing moved south or overseas. Residents fled to the suburbs, and the tax base eroded.

While other cities sought high-tech firms and nearby Stamford, Conn., became an office center, Bridgeport stayed locked into an industrial mentality. Later, environmental laws made it difficult to get new owners to buy old factories because of liability for contamination.

High corporate taxes discouraged companies from staying in the city. As a result, the economic boom of the 1980s washed right by Bridgeport.

The city is also hamstrung with union contracts under which police officers and firefighters can retire after 20 years and receive cost-of-living increases that are negotiated after they retire.

Some observers say the city's charter is partly to blame for keeping Bridgeport hamstrung by outdated practices. Its two-year mayoral term keeps the mayor constantly running for reelection. A commission is drafting a new city charter.

Other city officials say the mayor's bankruptcy petition is unnecessary; the city still is solvent, but it has a $12 million deficit in a $340 million budget.

Last week the Financial Review Board, a watchdog group, recommended an 18 percent increase in property taxes. On Monday, the Common Council voted instead to raise property taxes by 5 percent. Some residents are paying $5,000 in property taxes, the same as residents of the upscale suburb Westport, for far fewer services.

The mayor has already closed all but two parks and two of four senior centers, and cut recreation, street-sweeping, and snow removal. To balance the budget she was faced with cutting garbage pickup and trimming one-third of the police force.

After Mayor Moran, described as a maverick Republican in a Democratic stronghold, told a reporter in January that she was researching bankruptcy, shock waves rippled as far as Wall Street. Moody's and Standard & Poor's suspended the city's credit rating, but restored it when the mayor explained she was just researching.

The city's aldermen told her it would be illegal to declare bankruptcy without the approval of the state. The Financial Review Board passed a resolution prohibiting the city from filing, which the city's attorney says he feels exceeds that body's authority. Moran says she was asked not to even discuss bankruptcy because it would have a ``depressant effect'' on investment.

``I hope the bankruptcy petition will convince the state legislature and the governor that we have not been crying wolf all this time,'' says James Tansley, president of the Common Council.