State designates Harrisburg as 'financially distressed'

It's official. Harrisburg today became the state's 20th financially-distressed city.

The state Department of Community and Economic Development announced that the city of Harrisburg qualifies as financially distressed under the provisions of Pennsylvania's Municipalities Financial Recovery Act - also known as Act 47.

Pennsylvania's capital city has been struggling under mounting debt driven in large part by its troubled trash incinerator. The city hoped the incinerator would be a money maker. Instead the large amount borrowed to refurbish it has put the city nearly $300 million in the hole.

Act 47 was developed in 1987 to help troubled local governments return to financial health. Harrisburg Mayor Linda Thompson requested distressed status to help the city recover.

DCED Secretary Austin Burke has 30 days to appoint a recovery plan coordinator for Harrisburg. The coordinator will then have 90 days from contract execution to develop and propose a plan to the mayor, city council and DCED.

“This determination will bring objectivity and financial expertise to a city that desperately needs a path to fiscal recovery,” Burke said. “Taxpayers, creditors and investors will take comfort in knowing that Harrisburg is headed in the right direction. We hope this renewed confidence triggers solutions to help the city meet its pending obligations."

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