Mayor Thompson wants Harrisburg to avoid declaring bankruptcy so she has filed a petition with the state seeking status as a distressed city under Act 47. A hearing on the petition with the state Department of Community and Economic Development is set for 5 p.m. October 20th at the City Government Center. If Thompson succeeds, Harrisburg will be the 20th Pennsylvania community in official distressed status. Dozens of cities and smaller towns in Michigan, Illinois, Rhode Island, New Jersey and California are in similar state-run financial-recovery programs. There is much good that can come from Act 47 assistance. However, some municipal financial experts worry that Pennsylvania could get bogged down with cities' and towns' debts and potentially bring state taxpayers to the brink. Mayor Thompson says she is exploring all options and has proposed budget cuts that could close one fire station and lead to further city-worker layoffs.
City Councilman Brad Koplinski, however, is spearheading a drive by council members to seek their own experts for advice. City Council has requested proposals from legal firms to advise them on Chapter Nine bankruptcy as well as Act 47. Koplinski said in a statement last week announcing the RFP process, "To not take a prudent look at municipal bankruptcy as an option would be foolish. With our creditors not willing to work with us to pare down our debt, we need to make sure that the choice we make provides some debt relief to Harrisburg. This burden cannot be put solely on the backs of the taxpayers of the city of Harrisburg."
In addition to financial problems, Harrisburg has endured a recent rash of violent muggings that have put neighbors on edge. There has been an uptick in fights at Harrisburg High. And, the Harrisburg School Board is wrestling with a $7 million deficit that could force the elimination of all district sports activities and the cancellation of pre-K and full-day kindergarten classes.
Lancaster seems downright calm compared to Harrisburg, but the Red Rose City also faces significant fiscal challenges. Lancaster went through the state's Early Intervention Program, the step before Act 47. City officials raised the property tax 25 percent, reduced the number of police officers through attrition, and laid off four firefighters. Still, Act 47 could be a last resort if Lancaster can't meet its obligations. Gray joined other midstate mayors last winter at a legislative hearing in York urging lawmakers to give cities more taxing options so they would not have to rely so heavily upon the property tax. York's new mayor, Kim Bracey, asked for options like a local sales tax, an alcoholic drink tax, or allowing cities to force non-profits to pay taxes on a portion of the assessed value of their properties.
One possibility under Act 47 would empower Harrisburg to impose a wage tax on city commuters to raise some desperately needed cash. There are political pitfalls to all of these ideas. Just consider Democratic gubernatorial candidate Dan Onorato and the heat he has taken for enacting a "drinks tax" as Allegheny County Executive. He said he had to raise the tax to fund the Port Authority and blames the General Assembly for failing to give him other choices when he ruled out a property tax boost.
Mayor Gray this summer launched a new branding campaign to try to breathe more life into Lancaster's downtown. The city's First Friday venture with local art galleries, restaurants and performing arts groups has been quite successful. So there are bright spots and the mayors are looking for more good ideas. Also, Richard Schuettler, deputy executive director of the PA League of Cities and Municipalities will join us. Share your ideas with them this Thursday night at 8. Call in live at 1-800-729-7532 or email your comments to This e-mail address is being protected from spambots. You need JavaScript enabled to view it .
