Harrisburg Mayor Linda Thompson requested enrollment in Pennsylvania’s recovery and oversight program for distressed municipalities, saying the capital city stands “on the precipice of a full-blown financial crisis.”
Harrisburg faces “imminent and inevitable” defaults on about $44 million in bond payments due by Dec. 15, according to Thompson’s application for the state’s Act 47 recovery program. The city of 47,000 will miss payroll within a month, as well as its payment to the police pension fund due by Dec. 31, unless it obtains short-term loans, the application says.
Harrisburg officials have been weighing bankruptcy after the city missed debt payments for a trash-to-energy incinerator. Under Act 47 protection, Pennsylvania would help the city devise a recovery plan and give it priority in seeking state aid. The designation might also bolster the city’s standing in the credit markets through guarantees of financial support, Thompson said.