Harrisburg’s finances are relatively stable, a month after the COVID-19 health emergency ground the nation’s economy to a halt.
Bruce Weber, the city budget and finance director, today said that Harrisburg is better positioned financially to deal with the national economic calamity than many other municipalities.
“We are in a much better position than, I would say, potentially many cities right now that are facing the similar crisis as we are,” Weber told members of the Intergovernmental Cooperation Authority (ICA), the state-appointed body tasked with approving and overseeing a five-year financial plan for the city.
Weber credited several factors unique to Harrisburg.
First, the city’s business mix, while service-oriented, is relatively stable, dominated by government, health care and professional services. Also, many of the city’s industrial and small businesses are regarded as “essential,” he said.
He contrasted Harrisburg’s situation with that of two nearby towns that have seen rapid economic growth in recent years. Derry Township, fueled by Hershey’s tourist attractions, has been dramatically impacted financially, while Lancaster—also reliant on tourism and closer to hard-hit Philadelphia—recently furloughed dozens of full- and part-time city workers, Weber said.
Moreover, Harrisburg went into the year with a balanced budget and a healthy fund balance, he said. The city is also saving about $50,000 a week after Mayor Eric Papenfuse implemented a hiring freeze in March affecting 38 unfilled positions. In addition, the city, as a self-insured entity, is realizing substantial health care savings because people are forgoing and delaying medical procedures.
Marita Kelley, the city’s Act 47 coordinator, said that her analysis supported Weber’s view.
“Fortunately, the city is in a good fiscal position in terms of fund balance,” Kelley said. “We give the leadership of the city a good deal of accolades for that.”
As of April 16, she said, the city had $33.9 million in its general fund and $6.6 million in its neighborhood service fund.
“I realize it’ll be a tough go in the next several months,” she added.
Weber agreed that the future was opaque, dependent upon unknowable factors, such as if the health emergency would end and when the economy would revive.
So, while the city’s first-quarter real estate tax receipts dipped only by about 4 percent, he said he was concerned about the rest of the year, especially employment-based revenue from the city’s earned income and local services taxes.
Due to the fluid situation, Papenfuse asked the ICA board to delay the deadline for the city’s final five-year financial plan until Oct. 31. The board agreed, but added that it would like interim financial updates for the next six months.
In other action, the ICA postponed two events it had announced for this year: a planned economic development summit and citywide “listening sessions.” Both may be rescheduled for later in the year if the pandemic eases and life returns to normal.
“The city must come through this and, ideally, it will be stronger and more resilient,” said Audry Carter, ICA chair.