Harrisburg Files for Bankruptcy
October 13th, 2011Via: Bloomberg:
Harrisburg, Pennsylvania, which faces a state takeover of its finances, filed for bankruptcy protection after failing to pay the debt on a trash-to-energy incinerator.
The City Council made its 4-3 decision yesterday against the advice of a city attorney who said members did not follow proper procedure. It’s this year’s ninth bankruptcy filing by a municipal-bond issuer and the first by a U.S. state capital in at least three decades, said James Spiotto, a partner at Chapman & Cutler in Chicago who tracks such cases.
“This was a last resort,” said Mark D. Schwartz, the council’s Bryn Mawr, Pennsylvania-based lawyer. “They’re at their wits’ end.”
Harrisburg is the biggest city to file for bankruptcy since Vallejo, California, in 2008, according to a ranking by Municipal Market Advisors, a Concord, Massachusetts, research firm. U.S. municipalities have been battered by the financial crisis. Harrisburg’s filing came less than a month after Alabama’s Jefferson County Commission voted to try to avert what would have been the nation’s biggest municipal bankruptcy, and nine months after Vallejo emerged.
This is a very minimal explaination of what’s going on in this drama of Harrisburg. Basically the city council which are basically just a bunch of overpaid fat cats that get free health benefits and 20k a year to work four hours a week have 4 people who refuse to allow anything but their own agenda to be pushed. Their agenda is to pay for their own malfeasance (the whole incinerator debacle was criminal at best) by putting a ‘commuter tax’ on the people working as state employees in harrisburg. The mayor and state both have tried to push them towards using ACT 47, which has saved several large PA cities in distress already but they refuse as it will cede their control away. Moreover, they despise the very vocal mayor who is a formal council member. So the divisive nature of the issue basically comes down to the welfare class attempting to get people who have nothing to do with the incinerator purchase to pay for the incinerator purchase. This is on top of the already ludicrous levels of taxation for right to work, occupancy, even parking (which costs on the order of 18 dollars a day or 150 dollars a month). All this for a sub-standard city which offers little in return for it’s residents. One last thing – that is that bankruptcy is technically illegal due to the laws passed at the state level prohibiting it. So they are really just wasting more taxpayer time and money in their fruitless attempt to cling to power.