The mayors of three Pennsylvania cities that have all faced financial crises agree that filing for bankruptcy is not the best way for a city to recover.  Speaking at the Harrisburg Regional Chamber and Capital Regional Economic Development Corporation's 2011 State of the City event in Harrisburg this morning, Scranton Mayor Chris Doherty said "it isn't like a business declaring bankruptcy that can come right out of it -- bankruptcy by a city would leave a permanent mark."

Harrisburg's city council has filed for Chapter 9 bankruptcy as the city deals with a $310 million debt on its trash-burning incinerator and a multi-million structural budget deficit.  The city requested assistance under the state's Act 47 plan for distressed cities, but council rejected terms of the Act 47 proposal from the state, saying it did little for Harrisburg taxpayers while taking care of debtors.  Mayor Linda Thompson made a few changes to the Act 47 plan, but the majority of council members rejected it as well.

At this morning's event, the three city executives described bankruptcy as creating a perception to the business community, the people and the rest of the world that Harrisburg isn't solvent and would be unable to pay its bills.  They said the result would be businesses staying away and families not moving into the city.  Thompson said that she has already heard from one city she wouldn't name that indicated it was having trouble securing a loan because creditors are concerned that Harrisburg's debt issues will impact other cities.  Reading Mayor Thomas McMahon told a crowd of several hundred that he worries about municipal bond ratings.

The event gave the three mayors an opportunity to compare notes since all three have gone through Act 47 status.  Scranton has been in Act 47 since 1992 and Mayor Doherty said "the way the law is now, I don't think we'll ever get out of it."  Doherty expressed his belief that Act 47 needs to impose tougher requirements on cities to force officials to devise strategies that would enable them to emerge.

Harrisburg City Council voted unanimously last night to go back to the state's original Act 47 plan as a re-starting point to define a blueprint for recovery.

Harrisburg has two weeks to come up with a plan, or under legislation approved last month by Gov. Tom Corbett and the General Assembly, the state will take over financial operations of the city.

The video below examines some of the reasons why some of Pennsylvania's cities are facing financial difficulties.