Wednesday, August 27, 2014
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Prayer can only do so much to erase debt

Rather than contend with corporeal matters close at hand, the leaders of Pennsylvania’s hapless capital city are trying to engage mysterious forces well beyond their purview.

Prayer can only do so much to erase debt

Harrisburg Mayor Linda Thompson is praying for relief from debt payments larger than the city´s entire operating budget. (Photo/Carolyn Kaster)<br />
Harrisburg Mayor Linda Thompson is praying for relief from debt payments larger than the city's entire operating budget. (Photo/Carolyn Kaster) Carolyn Kaster

Rather than contend with corporeal matters close at hand, the leaders of Pennsylvania’s hapless capital city are trying to engage mysterious forces well beyond their purview.

Last week, Harrisburg Mayor Linda Thompson announced a three-day fast with area religious leaders in an effort to pray the city out of fiscal calamity.

News of her turning to heaven for budgetary assistance drew international attention. But it was nothing compared with the spectacle being contemplated by Harrisburg’s City Council, which narrowly voted last week to prepare for what would be the second largest municipal bankruptcy in U.S. history.

The Council majority’s focus is on other higher powers: the county, the state, Wall Street, or whoever else can be blamed for the city’s fiscal mess — besides, of course, themselves.

Harrisburg’s situation is serious, if not biblical. Consultants working under the state’s distressed-cities program, known as Act 47, expect it to run out of money this fall. And a botched incinerator project has saddled the city with a debt burden five times greater than its annual budget.

But Harrisburg is fortunate in that the state government it hosts, for all its faults, is able and willing to help. The Act 47 team has a reasonable plan to right the city’s finances by selling the incinerator and other assets, cutting costs, and moderately increasing taxes. That would allow the city to rebalance its books while paying down and refinancing its debt.

Some Council members have taken issue with details of the plan, but state officials have expressed a willingness to adjust it. The city should be negotiating with them, not threatening a fiscal nuclear option.

Moreover, a municipal bankruptcy would invoke similar austerity measures and asset sales under court auspices. But it would have huge consequences for the future creditworthiness and governability not only of Harrisburg, but potentially of other Pennsylvania municipalities. A bankrupt capital has obvious repercussions for the reputation of the entire state.

That’s likely why Republican state legislators, led by Sen. Jeffrey Piccola (R., Dauphin), are fast-tracking legislation to block a bankruptcy and appoint a management board to oversee Harrisburg. While that would be regrettable and constitutionally questionable, Piccola’s sense of urgency is warranted.

The mayor’s unorthodox approach appears to have contributed to Harrisburg’s political paralysis in recent years, and her latest quest for divine intervention is less than a sure bet. But in opposing bankruptcy and seeking a “cooperative spirit among government leaders,” she is at least praying for the right thing.

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