The city of Harrisburg, PA, recently filed for a Chapter 9 bankruptcy. PA Governor Tom Corbett then signed new legislation that allows for a takeover of Harrisburg, which would allow the governor to declare a state of fiscal emergency which would hopefully lead to a recovery plan for Harrisburg.
Harrisburg, with a population of about 50,000, is struggling to pay for essential services and to pay back a debt of $300 million related to an incinerator project that has yet to yield cash.
Harrisburg's mayor, the state legislature, and PA governor dispute the legality of Harrisburg City Council's decision to file the bankruptcy. A hearing is set for November 23 regarding the legality of the filing.
The action immediately generated conflict between the City Council and the mayor, Linda Thompson, the state legislature, and the governor, who dispute the legality of the Council's action in filing for bankruptcy. The governor may also need to get approval from the bankruptcy court to take over the city. Under the emergency bill, the governor can declare a fiscal emergency if it is determined that the city is insolvent or near insolvency, unable to provide vital services and has not adopted a fiscal recovery plan.
Whatever the extent of Harrisburg's troubles really are, this recent news is only troubling that bankruptcy effects everyone from the small to the large. Even a city can make attempts to file for bankruptcy to protect itself. Hopefully, Harrisburg gets on a plan to recover and keep functioning at its best for its citizens.