In a Capitolwire column yesterday, Pete DeCoursey argues the departure of Gov. Corbett’s top aide, alone, won’t mark the new direction donors and advisers are hoping to see.  Republican candidate for state attorney general Dave Free has a huge financial edge over his Democratic opponent, Kathleen Kane, reports the Associated Press.  Harrisburg got its second receiver yesterday, along with reasons the first one quit. 

(Harrisburg) -- The commonwealth's overseer of Harrisburg's Act 47 fiscal plan isn't happy with some major players in the capital city's recovery process. The state Department of Community and Economic Development has one major message for Harrisburg's City Council and Controller: Do what the city's Act 47 plan tells you to do, or Commonwealth Court will make you. DCED has filed a so-called "notice of non-compliance" against the city, citing City Council's refusal to raise the earned income tax, among other things, as a violation of the court-ordered plan. But Councilman Brad Koplinski says he's not on board with the entire plan just yet. "It appears to sell assets before negotiating with creditors," he says. "Putting the cart before the horse in selling the assets before negotiating with creditors does not seem like the correct option for us." Koplinski says he's open to creating a county-wide sales tax or other measures that could help bring in revenue. The latest snag in Harrisburg's fiscal recovery process comes just as former city receiver David Unkovic appeared in Commonwealth Court to explain why he left his post so unexpectedly. Unkovic has said he felt "boxed in" by creditors overseeing the city's debt-riddled incinerator. He's also testified the state told him he'd be let go after a press conference in late March where he criticized many of the key players involved in the recovery. DCED Spokesman Steve Kratz says that's not true. "At no point in time did anyone from the administration say that he would be removed, nor was there any intention to remove him. We were as surprised as anyone else," Kratz says. He does concede that some of Unkovic's remarks were troubling. "Granted, there were some outbursts that he had had recently, in recent weeks, that were concerning, that we felt could be detrimental to the overall recovery process," Kratz says. He adds Governor Corbett and his administration had faith Unkovic could help turn Harrisburg's finances around up until the day he resigned. Now the Commonwealth Court has approved a new city receiver: retired Air Force Major General William Lynch. Attorney Neil Grover, with Debt Watch Harrisburg, says it's up to the court to see that Lynch doesn't become frustrated in his new position. "They shall make sure that the office of receiver and Mr. Lynch have the independence needed to do this job and the resources to do this job. That's not an insignificant thing." All parties involved say they ultimately want Harrisburg to emerge from the Act 47 plan as a financially stable city. But getting there may take some time.

(Harrisburg) -- An advocacy group is teaming up with lawmakers to push for changes to the state law that oversees financially distressed cities like Harrisburg and Reading.  The Coalition for Sustainable Communities says changing Act 47 would be a step toward improving the fiscal health of struggling municipalities.  Lancaster Chamber of Commerce & Industry President Tom Baldridge is a member of the group.  He says numbers alone make the case for reforming the program.  "Forty-one percent of Pennsylvania residents now live in what is considered a distressed community by Pennsylvania standards.  That, I can assure you, is a number that is going up, not down.  It's a trend we simply have to stop for our economic prosperity in the future," Baldridge says.  The coalition wants a re-write of the law to allow it to trump previously negotiated deals with public worker unions.  It's a response to a state Supreme Court ruling last year that Act 47 recovery plans could not hold sway over a contract with Scranton's firefighters' union.

Former Democratic Sen. Bob Mellow’s has pleaded guilty to corruption charges.  Now: does that plea mean he saves his pension, or loses it?  The Patriot-News has a nice primer on state budget negotiations this year.  John Baer writes budget protest songs so you don't have to.  And we look at the chances Harrisburg could file for bankruptcy once a state ban sunsets in July.

(Harrisburg) -- A former state adjutant general who says he "likes a challenge" is Governor Corbett's nominee to take over as Harrisburg's new fiscal custodian. Major General William Lynch of Hazleton, Luzerne County has been tapped to take over the vacant post. Lynch is a member of the state Department of Military and Veterans Affairs' Hall of Fame and served as a general in the Air Force. He says he considers himself an outsider, which would help when trying to solve Harrisburg's financial issues. "I'm pretty apolitical and I've served three governors in cabinet positions of different parties, which is somewhat unusual," he says. "I am not part of the Harrisburg political issues because I'm geographically separated, so I think that'll be okay." Lynch will need to be confirmed by the state Commonwealth Court before beginning his work as the city's receiver. Former financial custodian David Unkovic resigned at the end of March after nearly three months on the job.

Altoona has entered the state’s Act 47 program for financially distressed communities – the 27th such community to do so since 1987.  Altoona is the 11th mid-sized city to receive protection under Act 47. That means roughly 20 percent of Pennsylvania’s mid-sized cities are financially distressed.

The logic is simple: Renovating an historic building in town is often more expensive than starting fresh in the suburbs somewhere.  Sponsoring Sen. Lloyd Smucker (R-Lancaster) said the proposed tax credit aims to nudge developers toward making the more expensive choice. “There’s a growing awareness that we really need to be doing things to help third class cities, and this would help build the tax base,” he said.

(Harrisburg) -- The man picked to turn around Harrisburg's struggling finances has left his job. David Unkovic resigned as the state-appointed financial custodian for the city, which is struggling with more than $300 million in debt. Neil Grover, with the group "Debt Watch Harrisburg," says in the wake of Unkovic's decision, bankruptcy remains a viable option for the capital. "The case for bankruptcy has always been strong, and the people that say otherwise are kidding themselves and kidding everybody else, and I'm not saying bankruptcy's a good thing," he says. Earlier this week, Unkovic called for state and federal investigations of the deals related to the city's incinerator that led to the debt crisis. He also called out critics, saying he was "trying to do the best" he could. "And so what choice do I have, to sit there and do nothing and watch this plan deteriorate and have this city go into financial chaos?" he questioned. Unkovic did not immediately return calls for comment today. Governor Corbett’s spokesman says the resignation was unexpected and the governor will appoint another receiver.

The man tasked with turning around the capital's shaky financial situation is asking for a state and federal investigation into the deals that led to the city's crushing debt. David Unkovic has requested the state Attorney General and US Attorney's offices look into possible illegal activities in the financing of the retrofit of the city's trash incinerator.

(Harrisburg) -- A new lobbying group is taking aim at state laws affecting cash-strapped communities -- such as Reading and Harrisburg. The "Coalition for Sustainable Communities" includes chambers of commerce and representatives from local governments. Jack Garner of the Pennsylvania League of Cities and Municipalities says the coalition aims to update laws governing things like pensions and union negotiations. "Over 2,500 municipalities are really continuing to function in an outaded, inflexible , and uncompetitive set of local laws, which haven't been changed since, in some cases, 1930," Garner says. He says the group is also interested in reforming the state's Act 47 program for financially distressed municipalities. Harrisburg and Reading are currently working through that initiative. A recent study revealed 46 percent of Pennsylvanians live in financially struggling communities.