HARRISBURG - Pennsylvania's deeply indebted capital city has qualified for a state program that tries to guide financially troubled municipalities back to health, state officials said Wednesday.
The program, known as Act 47, designates qualifying municipalities as "financially distressed," and gives them access to financial aid and guidance from a recovery-plan coordinator appointed by the state Department of Community and Economic Development.
Mayor Linda Thompson welcomed the step, although she has said it was an agonizing decision to seek state help earlier in the fall. In a statement Wednesday, she acknowledged that city leaders faced difficult choices if Harrisburg's problems are to be fixed.
Some city officials have said Harrisburg might be best served by seeking federal bankruptcy protection to force concessions from lenders. Thompson opposes a bankruptcy filing, and City Council members have not taken a vote to approve such a step.
Without help, Harrisburg will be unable to meet the health, safety, and public-welfare needs of its residents, said Austin Burke, secretary of the Department of Community and Economic Development.
Burke cited Harrisburg's defaults on debt agreements; its junk-bond credit rating, which will hurt its ability to get loans; soaring cash-flow deficit; and potentially costly lawsuits.
While Harrisburg is struggling with a budget deficit, city leaders also are in a stalemate over how to repay more than $280 million in debt tied to the costly and problem-plagued renovation of the city's aging trash incinerator.