AppId is over the quota
AppId is over the quota
A welcome marker is pictured in Harrisburg, Pennsylvania, October 12, 2011.
Credit: Reuters/Daniel ShankenBy Edith HonanNEW YORK | Mon Oct 24, 2011 6:08pm EDT
NEW YORK (Reuters) - Pennsylvania Governor Tom Corbett declared a fiscal emergency for Harrisburg on Monday, putting the state one step closer to a takeover of its capital city.
Harrisburg, which has more than $300 million in debt linked to a revamp of its incinerator, declared bankruptcy earlier this month. Last week, Corbett, who opposed the bankruptcy filing, approved a bill that creates a framework for a state takeover of Harrisburg's finances.
The declaration will ensure that "vital municipal services are maintained," Corbett said in a statement.
Harrisburg Mayor Linda Thompson and the city council have both opposed the state's takeover legislation.
Harrisburg is one of a handful of U.S. cities that has faced fiscal collapse. In recent years, two other cities -- Vallejo, California filed for bankruptcy in 2008 and Rhode Island's tiny city of Central Falls went bankrupt earlier this year.
Still municipal bankruptcies remain rare.
Corbett has said Harrisburg would have been better off if it agreed to a rescue plan under the state's Act 47 program for distressed cities -- which has seen Philadelphia and other cities through crises.
In July, the Harrisburg City Council rejected a state-approved rescue plan, which called on Harrisburg to renegotiate labor deals, cut jobs, and sell or lease the city's major assets -- its parking garages and the incinerator. In August, the Council rejected a similar plan put forward by the mayor.
In making the declaration, Corbett directed the state Department of Community and Economic Development to develop an emergency action plan within 10 days to ensure that vital services -- including police and firefighting, water and waste water, trash collection, payroll, and pension and debt payments -- are not interrupted.
"During a fiscal emergency, the city's authorities and elected officials will continue to carry out the duties of their respective offices as long as no decision or action conflicts with the emergency action plan," the statement said.
The next hearing on Harrisburg's bankruptcy filing is scheduled to be held November 23.
(Reporting by Edith Honan; Editing by Andrew Hay)
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