Harrisburg must find new revenue, cut costs to shed Act 47 status

(Harrisburg) — Harrisburg’s state recovery coordinator is recommending the city stay in the program for financially distressed cities for three more years.

It comes after Mayor Eric Papenfuse recently declared a “fiscal crisis.” He had been hoping to leave Act 47 this fall.

A recently released exit plan says Harrisburg has made significant strides, but still has a long way to go toward financial stability.

“We feel the city needs more time to look forward for the future forecasting and financial forecasting that we have available to us right now,” said recovery coordinator Marita Kelley.

To leave the Act 47 program, the city will have to reduce the extraordinary income and service taxes that are allowed under the designation. Those taxes currently raise about $11 million.

The money could be made up in part with an increase in real estate taxes.

Kelley said the city can gain some revenue by monetizing regional partnerships.

For example, she said neighboring municipalities rely on Harrisburg for emergency services such as fire.

“There are those opportunities for potential regionalization of different services, just using fire as an example, but there could be any number of services: public works, public safety, parks and rec.”

Kelley said Harrisburg will also need to find cost savings.

The plan notes Harrisburg may keep the additional taxes by securing a home rule charter or if the state legislature votes this fall to allow the city to leave Act 47 but maintain the taxing authority. 

The plan is open for written public comment  until Tuesday, July 24th. An oral comment period will be held at a meeting at City Hall at 5:30 p.m. on the 24th.