Jack H. Schick

Harrisburg Holds Its Ground



Posted: Friday, September 16, 2011

by Jack H. Schick

Harrisburg’s city council’s resistance to Pennsylvania Governor Tom Corbett’s insistence that the city produce a financial recovery plan is starting to pay off. This week the state chipped in $2.6 million so the city could pay its bills and meet its $1 million a month city employee payroll. Some leaders have called the governor’s threat to takeover the city because of its, multi-million dollar budget deficit and a $300 million debt associated with its trash incinerator a political ploy and an effort by the GOP lead state to interfere with the operation of Democrat ruled Harrisburg.

Last month, Harrisburg Mayor, Linda Thompson, who has devised a financial plan, but is having difficulty getting the city council to agree to it, was summoned to the governor’s office. Corbett told her in a letter, “If there is no approval plan at this point, then the city is likely to become mired in litigation and financial chaos. If the latter occurs, the commonwealth will not bail out the city. Indeed, if the city continues down the path of irresponsible economic decision-making, it is probable that legislative action will result in the city losing control of its ability to make such decisions.”

Governor Corbett told Mayor Thompson that if the council defeats her financial recovery plan he would sign a bill that would create a management board with broad powers to oversee the city. The Republican–sponsored bill, which passed the state Senate in June over vehement protests by Democrats, is pending in the House of Representatives.

In July, the city council rejected a plan by a state-appointed task force that was ordered to investigate the city’s financial situation. It is the first time that has happened in the 24 year history of the state law designed to help financially distressed cities. City council plans to continue to resist state demands. Some officials suggest that the best way to deal with the debt and deficit it to seek federal bankruptcy protection. That way they wouldn’t have to pay back the money they’ve borrowed. It would force concessions from the lenders.

Opponents to Thompson’s plan, which includes selling the city owned incinerator and parking garages, protested that, in her proposal, the only sacrifices made would be by Harrisburg citizens, and not the institutions and state and federal agencies that loaned the city money. The lenders, backers of bonds and professionals who gave the city bad advice while it borrowed itself into the deep hole it finds itself in, should be required to sacrifice, too.

The fact that the state has relented and given the city money this month encourages the city council to continue its resistance to demands for accepting a recovery plan.  They believe they can call Corbett’s bluff about taking over the city. Dramatic cuts in spending by his administration has begun to produce a surplus in the state coffers so they know there is now extra money to bail them out.  “Republicans don’t seem to get it. Sometimes you just have to put it on the credit card and worry about it later,” an unnamed pundit said.  If the state refuses to ‘pony up,’ the bankruptcy threat is still available.
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Top-level comments on this article: (1 total)
» left by elle kynzer
 246 days 11 hours ago.
32 fans. Follow elle kynzer on twitter!
Interesting,I did not know Harrisburg had so many problems.
» left by Jack H. Schick 246 days 11 hours ago.
99 fans.
I guess most cities do these days.
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