Finance

The state regulator launched a largely constructive report on Harrisburg's monetary well being – The Burg Information

Harrisburg's MLK Jr. Government Center

Harrisburg's budget position is "solid" and the budget is in excess. This comes from a largely positive annual report issued by the city's financial regulator.

The Interstate Cooperation Agency for Harrisburg (ICA) released its second annual report to the governor and lawmakers on Friday, stating that the city is in generally good financial shape.

"The report recognizes a number of areas in which progress has been made while identifying several priorities for improving financial management," said an ICA press release.

In 2018, the state created the ICA to oversee the creation of a five-year financial plan for Harrisburg.

The 26-page report presented on Friday is far more positive than last year's annual report, in which the city was sharply criticized for several alleged financial and accounting shortcomings.

Some of these criticisms – including a "low collection rate" on claims from the city's Neighborhood Services Fund (sanitation), outdated IT infrastructure, and long-belated auditing of city government's physical assets – remain in the 2021 report.

In addition, the city has not hired a new finance director since former director Bruce Weber resigned last year, and the city and the ICA have not yet ratified an intergovernmental cooperation agreement between the two bodies, the report said. Harrisburg and the ICA recently sought final ratification of this agreement.

However, the report said the city is financially sound under a revised five-year budget for Harrisburg that the ICA approved in March.

"The plan provides for a stable budget position with solid general fund assets and relatively stable income despite the global pandemic and economic crisis," the report's executive summary said. "It also foresees important initiatives, including financing needs for capital and restructuring debt obligations."

In addition, last year the state parliament expanded the city's extraordinary tax authority, which should expire in 2025.

"The city has received an important lifeline this year with the expansion of the temporary tax authority by the governor and general assembly," said Audry Carter, chairman of the ICA, in a statement. "We are committed to working with the city to develop business practices that will further increase the trust of the governor and the General Assembly."

As the city progresses, it is on the verge of exiting Act 47, the state's program for financially disadvantaged communities, according to the report. Harrisburg has been in Act 47 since 2010.

Recently, Mayor Eric Papenfuse told TheBurg that he expects the city to get out of Law 47 this summer.

The report paints a cautiously bullish outlook on Harrisburg's financial condition, a view reiterated by Carter.

"Together we know the opportunity for prosperity is before us," Carter said.

For more information about the ICA or to read the full report, visit their website.

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