Harrisburg Files for Bankruptcy

The City Council voted in favor of a municipal bankruptcy filing after rejecting financial recovery plans put forward by state officials and Harrisburg's mayor. But the way forward for the cash-strapped capital remains clouded while Pennsylvania lawmakers ponder a state takeover.

The council voted 4-3 Tuesday night in favor of seeking Chapter 9 bankruptcy protection.

Councilman Brad Koplinski told The Patriot-News the state-sponsored Act 47 plan and an alternative offered by Mayor Linda Thompson won't help the city out of a deep financial hole caused by a trash incinerator debt of $300 million.

A bill to give the state the power to take over many of the city's functions overwhelmingly passed the state House last month. The state Senate is expected to take up the bill next week.

That bill will let Gov. Tom Corbett declare a state of fiscal emergency and appoint a receiver to assume much of the decision-making authority when third-class cities like Harrisburg can't agree on a solution under the state's Municipalities Financial Recovery Act, often referred to as Act 47.

That plan, however, has been rejected by the City Council three times.

The bill would empower Corbett to take steps to ensure that police, fire, trash, sewer and other vital services continue. He would be able to appoint a receiver, subject to Commonwealth Court approval, who would then develop a long-term plan.

If the court approves that plan, the receiver would have broad power to implement it.

Copyright AP - Associated Press
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