Regional News

Harrisburg Debt Triggers Pennsylvania Legislation

Pennsylvania Sen. Mike Folmer, R-Lebanon, plans to introduce a legislative package to address issues raised by capital city Harrisburg's debt crisis.

The state legislature is scheduled to reconvene Tuesday.

According to Folmer, the package stems from two Senate local government committee hearings, in October and November, that focused on the financings of the Harrisburg incinerator retrofit project that left the city with more than $340 million of debt that it cannot pay, and under the oversight of a state-appointed receiver.

Folmer served on that committee, chaired by Sen. John Eichelberger, R-Blair Township.

The Harrisburg Authority's forensic investigation report of last January was the basis for those hearings. The authority, however, said lack of subpoena power limited the scope of the audit.

Folmer said that he would seek state appropriations to finish or otherwise complement the audit, subpoena power included.

Folmer's legislation would also appoint a special prosecutor to investigate the financial transactions of the Harrisburg Authority, the City of Harrisburg, and Dauphin County with an eye toward criminal proceedings.

The city's former receiver, David Unkovic, made that request at the Senate hearings.

"It got to the point where this thing was so bad, I mean, it stunk like a kettle of rotten fish and that goes through all the testimony for the two days of your hearing. Nothing fits together," Unkovic told the committee.

Folmer's legislation would also prohibit municipalities from engaging in swap transactions; strengthen Department of Community and Economic Development oversight; require only legitimate "self-liquidating" projects be approved for municipal borrowings; prevent certain risky practices; and add criminal penalties for filing false certifications that municipal debt is self-liquidating. It would also amend the Sewer Rental Act to require justifications for sewer rates and charges and impose criminal penalties for violations.

"While the public committee hearing answered a number of questions as to how the staggering city debt was created, I want to ensure the flaws, weaknesses, and mistakes that caused these financial problems will not be replicated in other municipalities across the state," said Folmer.




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