Pa. Capital Harrisburg Files For Bankruptcy

fromWITF

The city of Harrisburg has filed for municipal bankruptcy and is entering uncharted legal waters. Pennsylvania's capital is mired in more than $300 million of debt related to a botched trash incinerator project.

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The city council in Pennsylvania's capital defied the mayor, yesterday, and filed for municipal bankruptcy protection. Harrisburg has been struggling for months to address its devastating $310 million debt. Craig Layne of member station WITF has this report on the brutal political fight over the bankruptcy.

CRAIG LAYNE, BYLINE: Harrisburg's politicians have been sparring in a political boxing match for months now. Only this ring has a fighter in every corner: there's the mayor, there are two separate factions of the city council, and finally, state lawmakers. And caught in the middle of all this are Harrisburg's citizens.

NEIL GROVER: We are paying our state, county and local governments, now, to basically engage in illegal warfare at the most vicious level. And we have to pay every one of them to do it.

LAYNE: That's Neil Grover, an attorney who leads a citizen activist group called Debt Watch Harrisburg, which opposes the bankruptcy filing. He says if the city is granted bankruptcy, basic city services and cultural treasures could be immediately affected. Grover predicts yesterday's bankruptcy filing will be contested and the legal battle will leave the city bruised and wobbly, no matter what the outcome.

GROVER: We have culture and museums and entertainment and music, and a riverfront that's amazing. And all of those positives that reflect the lives of everyone in the region are still there, and those are now all at risk, all of them.

LAYNE: At risk because Grover says the bitter infighting between Mayor Linda Thompson and four members of city council is dragging on, threatening the city's upcoming budget. Brad Koplinski is one of those city council members who says bankruptcy is better than accepting the mayor's harsh recovery plan that calls for deep cuts.

BRAD KOPLINSKI: The plans really would decimate the city and really doom it to be a ghost town in which we would have to file for bankruptcy in three to five years anyway.

LAYNE: Mayor Thompson says she's tried everything she can think of to get the council to adopt her cost-cutting measures, including prayer.

MAYOR LINDA THOMPSON: You have a plan on the table. It's not the perfect plan. Nothing is perfect, quite frankly, other than God and my savior, Jesus Christ, but that's my personal belief.

LAYNE: Thompson says the city council has no legal right to file the bankruptcy petition, and she's brought in an outside attorney to fight the action.

THOMPSON: I am disappointed in council's actions. They did not weigh this well. They have people in their ears who believe they know the law, people who have their own political agendas as well, and they've been led down the wrong lane.

LAYNE: Just blocks away from city hall, state senators at the capitol are preparing to vote on a bill next week that would take control of the city's finances. The lead author of that bill agrees with the mayor, that Harrisburg's bankruptcy filing is illegal, that the city council doesn't have the authority to file it.

Attorney Neil Grover, of the citizens group Debt Watch Harrisburg, says as this fight escalates and goes to the courts, judicial decisions could well decide the fate of numerous financially struggling municipalities.

GROVER: We could write the law on the city's rights and municipalities' rights around the country. But, you know, we are clearly not the only municipality who has borrowing issues that have crippled them. Do the rules get rewritten because we borrowed more money than anyone can possibly repay?

LAYNE: Lots of municipal jobs have been pared over the past year as Harrisburg has struggled to pull itself out from under its crushing debt load. Those cuts haven't extended yet to public safety, though the threat looms. Neil Grover hopes whatever decision is rendered in the coming weeks will come before Harrisburg and its fight-weary residents have been knocked down so many times they can't get back up.

For NPR News, I'm Craig Layne in Harrisburg, Pennsylvania.

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