Finance

Mayor to declare fiscal disaster in Harrisburg: ‘Metropolis now faces a looming monetary disaster’ – PennLive.com

On Friday, the state Legislature declined to offer Harrisburg a quick and soft landing out of Act 47.

On Monday, Mayor Eric Papenfuse will declare a state of fiscal crisis in the capital city.

Papenfuse will announce details at a news conference at 1 p.m. Check PennLive for updates.

“With the State Legislature’s failure to act Friday to extend Harrisburg’s taxing authority beyond Act 47, the city now faces a looming financial catastrophe that will require immediate implementation of austerity measures to begin to close a projected $12 million budget deficit over the next three years,” Papenfuse said in a news release on Sunday evening.

Pennsylvania lawmakers opted not to grant Harrisburg’s request for an exit from distressed city status, with an extension of the expanded taxing powers that carries with it. Advocates for the city were seeking approval of the special status in the state’s fiscal code that accompanies the $32.7 billion general fund budget.

But the agreed-to amendment was introduced in the Senate Appropriations Committee Friday afternoon with no reference to the capital city.

The mayor and other city officials have argued that the “distressed” designation has dampened the city’s ability to attract new businesses, and also limits its ability to cut debt service costs by refinancing debt.

The city’s state-appointed recovery coordinator Marita Kelley, in a financial review prepared this spring, said she believes Harrisburg has made significant steps forward under the terms of it’s “Harrisburg Strong” recovery plan adopted in 2013. But that recovery, Kelley stated, is not quite complete.

She has recommended the city stay in Act 47 for another three years, and she is currently in the final stages of developing an exit plan that would hopefully see the city leave its Act 47 status in 2021. Kelley said the initial draft of her plan is due by July 9.

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