Friday, December 26, 2014

Harrisburg's choice: Sell parks, or go bankrupt?

"There's never been a default like this in Pennsylvania"

Harrisburg's choice: Sell parks, or go bankrupt?

"Harrisburg, the capital of Pennsylvania, will consider Chapter 9 bankruptcy protection along with tax increases and asset sales as options to address $68 million in debt service payments due this year," Bloomberg Business Week reports here.

"Every option, including tax and fee increases, bankruptcy and a state takeover through Pennsylvania’s Act 47 municipal oversight program will be considered, said Susan Brown-Wilson, chairwoman of the Budget and Finance Committee, which began a week of hearings last night to consider a 2010 spending plan.

"The $68 million in debt service payments that Harrisburg faces in connection with the construction of a waste incinerator this year is four times what the city of 47,000 expects to raise through property taxes, and $4 million more than the city’s entire proposed operating budget...

"Wilson was among five Council members who voted last year to reject a 2010 budget proposal by former mayor Stephen Reed. The proposal would have attempted to cover the debt service costs by selling assets such as an historic downtown market," City Island "in the Susquehanna River that includes the city’s minor-league baseball stadium, and the city’s parking, sewer and water systems.

"The plan to raise $69 million by selling downtown features was reinstated last month by Linda Thompson, the newly elected mayor, in a substitute budget. The seven-member council has until Feb. 15 to approve a final 2010 budget....'There’s never been a default like this in Pennsylvania municipal history,' she said.”

Joseph N. DiStefano
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Joseph N. DiStefano
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