STATE CAPITOL, HARRISBURG—The State House has sent to Governor Tom Corbett a bill that would allow the state takeover of Harrisburg. House members approved Senate Bill 1151 by a vote 177 to 18. The Governor is expected to sign the bill into law when his schedule permits. The bill was co-sponsored by Senator Jeffrey Piccola, R-Dauphin/York and Representative Glen Grell.
The bill would apply to any third class city, like Harrisburg, that failed or refused to adopt a recovery plan under the state's Act 47 program for economically distressed municipalities. The measure would allow the Governor to declare a state of fiscal emergency within the distressed city, which ensures that vital municipal services, such as police and fire protectin and trash collection are maintained. Following the declaration, the Governor, through the Department of Community and Economic Development would petition Commonwealth Court to appoint a Receiver for the city, who would be responsible for developing and implementing a financial recovery plan.
Even after a receivership petition is filed, elected officials in the municipality would be given a final opportunity to develop a plan of their own. If they fail to do, the Receiver, would then have control of all of the municipalities financial matters relating to the recovery plan. The Receiver would remain in place for at least two years.
Statement by Harrisburg City Council members Eugenia Smith, Susan Brown Wilson, Wanda Williams and Brad Koplinski
"We are not surprised by the actions taken by the State Senate and House. The legislature, led by Senator Jeff Piccola, has changed the rules of how Act 47 works after Harrisburg entered the process. That is not right and it is un-American. First they attempted to restrict the city's ability to generate revenue and negotiate with its creditors, which were allowed in the Act 47 law, as well as penalize the city if it filed for bankruptcy. But that wasn't good enough. Now this takeover legislation gives a receiver unlimited power to sell any resource the city and its authorities have, without allowing Harrisburg an alternate source of revenue. Wall Street can get paid 100 cents on the dollar and the people of Harrisburg will be subjected to exorbitant property tax and other increases so that we can pay our operating budget. And after all the city's assets are sold and the city is on its knees, the receiver has the ability to file for bankruptcy to pick the bones of our city clean. But by then, all the creditors have been paid, so the bankruptcy would go after our employees and pensioners. And according to the House Committee on Appropriations, the receiver will cost over $2 million a year to provide these services."
The City Council lawfully filed a petition for bankruptcy last week to protect the taxpayers of Harrisburg. This was to allow all the parties to sit at the table, so that there can be a global solution with shared pain, with all the stakeholders providing a substantive, but fair contribution to solving Harrisburg's financial crisis. This process also stops all of the current lawsuits against the city and allows everyone to take a step back and reconsider their contributions to this solution. We ask that the Governor either not sign or not implement SB 1151, to allow time for the bankruptcy process to work through the system.