Day By Day

Wednesday, October 12, 2011

Clarifying the Situation in Harrisburg

Read it and weep:

(Reuters) - Pennsylvania's capital, Harrisburg, filed for a rare Chapter 9 municipal bankruptcy on Wednesday after it was unable to resolve its debt crisis with creditors and faced a possible takeover by the state.
Harrisburg becomes one of the biggest cities to opt for the little-used chapter of the U.S. bankruptcy code.
Harrisburg said in a court filing it was unable to continue paying for critical services as well as roughly $300 million in debt that funded an incinerator project.....

Pennsylvania's legislature is considering a bill that would call for an eventual takeover of Harrisburg and the forced implementation of a fiscal rescue plan.

In July, the city council rejected a state-approved rescue plan, which called on it to renegotiate labor deals, cut jobs, and sell or lease its most valuable assets, including the incinerator and parking garages.
In August, the council rejected a similar approach crafted by Mayor Linda Thompson, saying that both plans were overly burdensome for Harrisburg residents and did not ask enough of the county, bondholders and the bond insurer, Assured Guaranty.

At least the filing has made it clear for all to see that the position of the Council, which has rejected all proposed solutions to the crisis, boils down to the protection of government jobs and labor deals.

No comments: