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Governor Signs Bill That Could Allow State Takeover of Harrisburg Finances

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The clock is ticking again on Harrisburg’s financial future.   Governor Corbett signed a bill Thursday morning giving him power to take control of the city’s finances if necessary.

Governor Corbett signed Senate Bill 1151 without fanfare and a spokeswoman declined to do an interview about his next step.  But she did tell us the Governor will declare a state of fiscal emergency for Harrisburg soon and won’t wait for a bankruptcy filing to play out in court. The state expects city council’s petition for municipal bankruptcy to be dismissed.  Harrisburg’s mayor is also challenging it, and a judge has set a hearing date for late November.

Once the Governor declares a state of fiscal emergency, the secretary of the Department of Community and Economic Development would be granted emergency powers to draw up an Emergency Action plan in the distressed city to coordinate vital services and ensure public safety.  That could include police and fire, wastewater and water, trash collection, payroll, pension and debt payments.  The Governor could also petition Commonwealth Court to place the city in receivership. However, the city would still be given a final chance to draw up its own recovery plan that’s acceptable to the state.

Harrisburg Mayor Linda Thompson is asking City Council to come together in support of a financial recovery plan that averts a state takeover.  She says the taxpayers and voters of the city voted them in office to do their business. She’s telling council “Why would you work so hard to become elected officials and allow the Governor to take over your city?”

State Takeover Looms Over City of Harrisburg

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State takeover legislation is another step close to the governor’s desk, after passing the Senate 37 – 13 on Tuesday afternoon.  Despite $450 million dollars in mounting debt, officials in the City of Harrisburg cannot agree to a financial recovery plan.  SB 1151 would allow the governor to declare a state of emergency and assume control of the capital city’s finances.  The governor would then be able to appoint a receiver to create and implement a long-term recovery plan for the city.

Critics, like Senator John Blake (D-Lackawanna), call it an overreach.  “It disrespects longstanding principles of democracy, autonomy and local sovereignty,” Blake said on the Senate floor. 

Proponents, like Senator Jeffrey Piccola (R-Dauphin), call the takeover unfortunate, but necessary.  “If this bill does become effectuated, and a declaration of fiscal emergency is made by the governor, [there’s] a 30-day window of opportunity for the mayor, city council and the commonwealth to resolve their differences and come to a consent agreement,” says Piccola, who would prefer city officials come to a resolution themselves. 

A federal bankruptcy judge has set a Nov. 23rd hearing date to hear oral arguments over the legal issues that surround Harrisburg City Council’s Chapter 9 bankruptcy petition.  Council defied Mayor Linda Thompson and state officials, earlier this month, by voting 4 – 3 to seek bankruptcy protection.

Councilman Brad Koplinski says bankruptcy is a better option than accepting a harsh recovery plan that would doom the city, thus putting it on a path to bankruptcy anyway.  Mayor Thompson, however, says City Council does not have the authority to file the bankruptcy petition.  “They have people in their ears who believe they know the law, people who have their own political agendas as well, and they’ve been led down the wrong lane,” Thompson said at a recent news conference. 

HB 1151 still requires one more House vote before it can be sent to the governor’s desk.  That could happen as early as Wednesday.  Meanwhile, the capital city’s ongoing woes have recently caught the attention of the national media.

Forcing Act 47 on Harrisburg?

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    Under the state’s Act 47, cities can be declared financially distressed, setting the stage for debt restructuring and other recovery mechanisms. Under a bill passed by the Senate Tuesday, the process could be taken a step further, giving the state the power to establish a management board and mandate Act 47 for cities like Harrisburg.

Senator Jeffrey Piccola (R-Dauphin)

Piccola Seeks to Mandate Act 47 for Harrisburg

    The state’s capital city is in trouble, and officials are mulling over a possible bankruptcy filing that critics say would be devastating. The Senate bill, sponsored by Jeff Piccola (R-Dauphin) would block such a filing. The bill also includes a provision that would withhold state funding if the city or management board fails to “identify, sell, lease or dispose of its assets.”

    The management board would be comprised of three members, two appointed by the governor and one by county commissioners where the city is located. While the measure would affect any city of the 3rd class, the bill is a direct response to the ongoing problems in Harrisburg, which is groaning under the weight of enormous debt mostly tied to a financially disastrous incinerator project.

    Piccola says Harrisburg officials have “thumbed their nose” at Act 47 for over a year and bankruptcy is simply not an option.

    The bill now goes to the state House of Representatives.

Harrisburg Sets Spring Rain Record

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The soggy spring was one for the record books in the state capital.   It is officially the wettest spring ever for Harrisburg.

Matt Steinbugl, meteorologist with the National Weather Service in State College, says they measured 20.79 inches of rain in March, April and May. Steinbugl says that’s more than 9 inches above average, and beats the previous record by more than two inches.

The old record was 18.18 inches set in 1983.

Steinbugl says the area was in a consistent active weather pattern through most of the spring. Annual rainfall in Harrisburg averages about 41.45 inches, so the city has already seen half of its annual average in the first three months of the year. Meteorological summer began on June 1st.