Broke Shamokin, Pa., Seeks State Crutch That Few Cast Off

Map of Pennsylvania highlighting Northumberlan...

Map of Pennsylvania highlighting Northumberland County (Photo credit: Wikipedia)

(Reuters) – Shamokin, Pennsylvania, tucked away in the coal country about 120 miles northwest of Philadelphia, has $800,000 of unpaid bills and can’t get a loan from a bank. It’s so broke, the gas service to city hall was temporarily cut off last month.

So the council for the city of 7,000 residents has agreed to seek entry to a state financial oversight program dating from 1987 that facilitates access to credit and permits the levying of certain taxes. Now, though, some lawmakers say the program is more like a trap than a benefit: municipalities get into it, and few get out.

Just seven of the 27 local governments to enter state oversight under the program, known as Act 47, have ever been released from it. As a result, legislators want to cap how long cities can stay under state oversight and, in the hardest cases, impose a municipal death penalty that amounts to disincorporation and a state takeover. The law was passed in a bid to help Pennsylvania cities battered by the decline of the American steel industry in the 1970s and ’80s.

Read more at http://www.philly.com/philly/news/Broke_Shamokin_Pa_seeks_state_crutch_that_few_cast_off.html#CTx13mYx3Q210qd0.99

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Harrisburg Is Running Out Of Time To Solve Run-Away Debt Crisis

This City of Harrisburg has found itself $288 MILLION dollars in debt due to a failed attempt to retrofit the city’s incinerator.  The Harrisburg Authority will owe $68 million dollars by the end of the year!  The City is teetering on the brink of bankruptcy. 

Governor Ed Rendell addressed City Council last night and said they should avoid bankruptcy, going under Act 47 (no $%&*), pick a plan and move forward as Harrisburg is running out of time.  He stressed they should all work together as the state and federal government will be hard pressed to bail Harrisburg out of its financial quagmire.

Read the entire article here: http://www.centralpennbusiness.com/component/content/article/35-breaking-news/82014-harrisburg-mayor-no-timeline-for-debt-plan