Is it Constitutional for a Governor to take over a city that is bankrupt? Will this spread throughout the country? And what would stop a seizure by the Federal government if this is permitted? On the other hand, Harrisburg is bankrupt and needs intervention due to a failure of leadership.
The bill which he (Governor Corbett) signed allows the Governor to declare a fiscal emergency and develop a plan for recovery. The city of Harrisburg is in dire straits. They have $300 million in debt and are barely paying for essential services. Harrisburg filed for bankruptcy under Chapter 9 protection, immediately setting off a firestorm between the legislature, the city and the Governor.
The courts have to approve the takeover.
“The bill signed into law today will help to enforce Act 47 when municipalities fail to adopt a fiscal recovery plan, making it clear that if there is a failure to act, the state will intervene,” Corbett said in a statement. If the city adopts a sound fiscal recovery, the takeover is averted. Read here: Harrisburg takeover bill
Harrisburg, PA, with an annual budget of $56 million, wound up with incinerator debt of $288 million. It was dumb and it had consequences including for those who originally benefited. Unfortunately, someone does need to take them over.
Harrisburg also spent generously on union pensions and lifetime health insurance.