Pennsylvania’s Senate late Tuesday approved a bill that would force a state takeover of Harrisburg and other financially strapped cities if they don’t approve a recovery plan, and prohibit them from filing for bankruptcy protection.
The bill, sponsored by Sen. Jeffrey Piccola, R-Halifax, passed by a 29-to-21 vote and goes to the House for consideration. It would establish a management board to force implementation of the plan, under a program for distressed communities called Act 47.
Gov, Tom Corbett said earlier in the week that he would sign the bill.
Harrisburg, the state’s capital, is laden with $220 million of incinerator-related debt and entered the program in December.
Piccola’s legislation applies to third-class cities. The state categorizes its cities into classes, or tiers, by population. His bill also includes a provision that would withhold state funding if a city or management board fails to identify, sell, lease or dispose of its assets.
“We’ve watched and waited for the city of Harrisburg to act responsibly for over a year,” Piccola said in a statement. “Instead, they have thumbed their noses at the Act 47 program and process, one that the city willingly pursued.
“The General Assembly is calling on the local government officials to adopt the plan and avoid using bankruptcy as leverage because it’s simply not an option.”
Opponents of the bill argue that removing bankruptcy as an option would effectively deny the city a necessary bargaining chip.
On Tuesday night, Harrisburg was scheduled to host a public hearing on a recovery plan, produced by Novak Consulting Group of Cincinnati on behalf of the state Department of Community and Economic Development two weeks ago.
In a 418-page report, Novak said Harrisburg could run out of money in September and recommended, among other things, selling or leasing such assets as the incinerator and parking garages. It also advised the city not to file for bankruptcy.
Last week, the City Council voted 4 to 3 to authorize Mayor Linda Thompson to prepare for a possible bankruptcy filing under Chapter 9.