The state takeover of Harrisburg has officially begun.
Gov. Corbett today signed the swift-moving bill that authorizes the him to declare a fiscal emergency in the Capital city and appoint a receiver to develop and implement a fiscal recovery plan.
“The bill signed into law today will help to enforce Act 47 [the state law aimed at helping struggling cities solvent]when municipalities fail to adopt a fiscal recovery plan, making it clear that if there is a failure to act, the state will intervene,” Corbett added. “This legislation does not change the overall goal, and that goal is for distressed third-class cities to adopt and implement a fiscal recovery plan that will lead to solvency.”
The legislation (SB 1151) passed the House and Senate by wide margins earlier this week.
Under the new law, the governor can declare a fiscal emergency after it is determined that a so-called third class city - which includes 52 other municipalities in addition to Harrisburg - is insolvent or projected to be insolvent within 180 days, is unable to provide citizens with vital services and has failed to adopt a fiscal recovery plan.
“I remain a strong proponent for municipal governments tackling their own problems and coming together to develop a fiscal recovery plan when necessary,” Corbett said. “But when that fails to happen, the state has to take action to ensure public safety
Harrisburg will now have 30 days to develop a fiscal recovery plan that is acceptable to the secretary of the Department of Community and Economic Development (DCED). If a plan is adopted, a takeover is averted and the distressed city moves forward with implementing the plan, Corbett said in a news release.
When a fiscal emergency is declared the DCED Sec. Alan Walker can Grant emergency powers to develop an Emergency Action Plan in the distressed municipality to coordinate vital services and ensure public safety. Services include police and firefighting, water and wastewater, trash collection, payroll, and pension and debt payments.
The governor can petition the Commonwealth Court for the distressed third-class city to be placed into receivership. The receiver will have 30 days to develop a fiscal recovery plan that will be submitted to the Commonwealth Court for approval. Once approved, the receiver will be charged with implementing the plan and will have control of the municipality’s financial matters relating to the recovery plan.
If an acceptable plan is adopted within 30 days of the petition, state intervention is averted and the distressed city moves forward with implementing their approved plan.
The bill also establishes a four-member advisory committee that includes the mayor and city council president of the distressed city, an appointee of the affected county and an appointee of the governor. It also prohibits the levying of a commuter tax on non-residents - something that Harrisburg Mayor Linda Thompson had considered as a way of raising revenue.
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