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Pennsylvania lawmakers eye tighter oversight of local debt
Reuters ^ | Oct 4, 2012 | Mark Shade

Posted on 10/07/2012 8:33:38 AM PDT by george76

Pennsylvania legislators, grappling with capital city Harrisburg's $340 million of debt, set out on Thursday to tighten the state law that governs how cities and towns win approval for complex, taxpayer-funded projects.

In a day-long hearing, members of Pennsylvania's Senate Local Government Committee questioned former local officials publicly for the first time about how Harrisburg could have racked up so much debt tied to renovations of its ill-fated trash incinerator.

...

A handful of other U.S. municipalities - in particular, Alabama's Jefferson County, which filed the country's largest Chapter 9 bankruptcy last November - were also undone largely by debt from underperforming public projects financed with revenue bonds.

Harrisburg's bankruptcy case was thrown out because state legislators passed a law banning the city from filing. That ban was extended until November 30. If lawmakers don't extend the ban again, William Lynch, the city's state-appointed receiver, could put the city into bankruptcy again.

...

CITY BORROWED MILLIONS TO PAY FOR OPERATIONS - AUDITOR

Harrisburg's finances ran into trouble when it first issued, and later guaranteed, debt to repair and retrofit its trash-to-steam incinerator from the early 1990s to 2007.

The city sold the flailing incinerator to the newly formed Harrisburg Authority in 1993. The authority began borrowing millions of dollars for operating capital. It would then borrow millions more to refinance that debt, forensic auditor Steven Goldfield testified at the hearing.

Goldfield said Pennsylvania law bars long-term borrowing for government operations, but that's what Harrisburg was doing with its incinerator.

"It's akin to paying your rent with a credit card and never paying the balance off, and continuing to do it," Goldfield told state senators. "At some point you're paying exorbitant interest rates, you haven't addressed the problem, and the debt load is beyond your capability."

(Excerpt) Read more at news.yahoo.com ...


TOPICS: Crime/Corruption; Government; News/Current Events; Politics/Elections; US: Alabama; US: California; US: District of Columbia; US: Illinois; US: Pennsylvania
KEYWORDS: harrisburg

1 posted on 10/07/2012 8:33:41 AM PDT by george76
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To: george76
I took 81 through Scranton last week. As some northeasterners know, the 81 corridor there has been under construction for at least 30 years. Still is.

Scranton's the place where the average cop makes $70K/yr and the average wage-earner makes $26K/yr.

If that highway construction ever ends, I don't know what's going to happen to that city.

Probably never will though.

2 posted on 10/07/2012 8:58:17 AM PDT by Steely Tom (If the Constitution can be a living document, I guess a corporation can be a person.)
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To: fatima; xsmommy; Nowhere Man; South Hawthorne; brityank; Physicist; WhyisaTexasgirlinPA; GOPJ; ...

PA Ping!

If you want on/off the PA Ping List, please freepmail me. Thanks!


3 posted on 10/07/2012 11:29:59 AM PDT by randita
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To: Steely Tom

IIRC, Scranton is already circling the drain:

http://globaleconomicanalysis.blogspot.com/2012/07/scranton-mayor-slashes-all-public.html


4 posted on 10/07/2012 1:37:46 PM PDT by carriage_hill (Libs, dems, unions, leftist scum & murderous muzzies - are like bacteria: attack, attack, attack!)
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