2011-11-10 / Features

Pa. Orders Fee Increases, Layoffs In Capital City

By Marc Levy

HARRISBURG, Pa. (AP) – Laying off several city employees and increasing parking fines and business license fees in Pennsylvania's financially troubled capital are part of the state's emergency takeover plans, Gov. Tom Corbett's administration said Thursday.

With its new, unprecedented powers to manage Harrisburg's finances, the Corbett administration revived the fee and fine increases and layoffs that were recommended previously by a state task force but rejected by the City Council.

A divided City Council last month filed for federal bankruptcy protection in an effort to get creditors, including Dauphin County, and bond insurer Assured Guaranty Municipal Corp. to absorb a portion of the approximately $300 million in debt tied to its trash incinerator.

But the Republican-controlled state Legislature and Republican governor enacted a takeover law last month in a bid to force Harrisburg alone to pay down the debt. The city of 47,000 residents is located about 100 miles west of Philadelphia.

Separately, Mayor Linda Thompson and Corbett also oppose the City Council's bankruptcy petition, which is awaiting a Nov. 23 court date for oral arguments on legal questions surrounding the filing.

The Corbett administration on Thursday also ordered a continued halt already adopted by the city on making discretionary purchases, hiring and most borrowing, as well as limits on employee overtime, capital project spending and optional contracts for professional services or commodities.

In addition, it ordered changes in various city operations that were also recommended by the task force as a way to increase efficiency and cut costs. The layoffs would involve three park rangers and a clerical employee, at least.

In the meantime, the state's takeover law gives Harrisburg a grace period of 30 days, ending Nov. 25, to develop a financial recovery plan that's acceptable to the Corbett administration. If the 30 days pass without an agreement between the city and the state on a plan, the state Commonwealth Court could authorize the appointment of a receiver named by the governor.

The receiver would have greater power over Harrisburg's finances than the administration has now. For instance, the law allows a receiver to sell city assets, approve contracts and file for federal bankruptcy protection but not raise taxes, with a goal of paying down Harrisburg's incinerator debt.

A Corbett spokeswoman said the governor's office is interviewing candidates for the receiver's position and is considering three to five people. The spokeswoman, Kelli Roberts, declined to name them.

In Thompson’s nearly two years in office, she and the City Council have been unable to agree on a plan to repay the incinerator debt, leaving the cash-strapped city tens of millions of dollars behind on payments.

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