Gov. Tom Corbett is taking steps toward assuming control of the finances in Pennsylvania's troubled capital under a freshly signed state law aimed at giving him unprecedented power to force Harrisburg to pay off its staggering debt.
The steps by the Republican governor are, for now, running alongside a City Council petition _ filed in defiance of Corbett _ seeking federal bankruptcy protection in hopes of forcing creditors to forgive a substantial portion of the debt on Harrisburg's trash incinerator.
Corbett signed the law Thursday. He expects as early as next week to declare Harrisburg to be in a state of fiscal emergency, which ultimately could result in the appointment of a receiver who would have the power to sell city assets, approve contracts and file for federal bankruptcy protection, but not raise taxes.
Corbett's office is finalizing the paperwork and, once it is finished, he will sign it, spokeswoman Kelli Roberts said.
Corbett said he remains a strong proponent of allowing municipal government to solve its own financial problems, but that the state must act to preserve public safety if local officials fail to act.
"I remain a strong proponent for municipal governments tackling their own problems and coming together to develop a fiscal recovery plan when necessary," he said in a statement. "But when that fails to happen, the state has to take action to ensure public safety."
Harrisburg Mayor Linda Thompson, who has sought Corbett's help in her stalemate with the City Council over a repayment strategy, said she will obey the law. But she still hopes to strike an agreement with the City Council to prevent the full breadth of a takeover going into effect.
"It is a sad day in Harrisburg," she said.
The bill's signing came on the same day that state lawmakers held a joint House-Senate committee hearing on the reasons why Pennsylvania's municipalities are increasingly falling into distress and reaching out to the state for help.
"It's so hard to sit here and not feel overwhelmed by the depth and breadth of the problem," said Sen. Jane Earll, the Erie County Republican who chairs the Community, Economic and Recreational Development Committee.
Some of Pennsylvania's largest cities, including Scranton, Reading and Pittsburgh, are in a state program known as Act 47, which is designed to help financially distressed cities recover without filing for federal bankruptcy protection.
While the bill signed by Corbett is designed to target Harrisburg, it also legally applies to Pennsylvania's third-class cities, including Erie, Allentown and Reading.
Opponents of the bill suggest that it violates the state constitution's rules over the delegation of power, not to mention disrespecting longstanding principles of democracy, autonomy and sovereignty by stepping over locally elected officials.
The likelihood of the takeover bill's passage by the Republican-controlled Legislature hastened a move by the divided City Council to file a Chapter 9 bankruptcy petition in federal court last week.
The bill is a response to an unprecedented rejection by Harrisburg's City Council of a financial recovery plan presented to it under Act 47.
The cash-strapped city's inability to make installment payments on an approximately $300 million debt on the trash incinerator drove it into the Act 47 program.
But City Council voted 4-3 against a plan drawn up by state-appointed consultants and supported by Thompson. The plan, they said, would heap a disproportionate share of financial pain onto Harrisburg residents, while largely giving a pass to Dauphin County, which has backed part of the debt, and the bond insurer, Assured Guaranty Municipal Corp.
Once Corbett signs the declaration, he can order Harrisburg to obey financial plans drawn up by his appointees, the most aggressive intervention yet by the state government into the affairs of a Pennsylvania city in a state with a strong of tradition of local control.
He can direct his secretary of community and economic development to develop an emergency action plan within 10 days to ensure the continuation of vital services, including payroll and payments for pension and debt obligations.
If 30 days pass without an agreement between the city and the state on a financial recovery plan, the state Commonwealth Court could authorize the appointment of a receiver named by the governor.
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