Lawmakers pass bill to restrict bankruptcy filing by Harrisburg

State lawmakers have passed a bill designed to prevent Harrisburg from filing for bankruptcy.  It now heads to Governor Tom Corbett's desk for his approval.

State Senator Jeff Piccola introduced the bill weeks ago because he felt Harrisburg city officials were using the threat of bankruptcy as leverage against creditors. Piccola also included a provision that would have forced the city to accept the Act 47 plan submitted by a state appointed consultant, but that part was not included in the final version of the bill.

Under the final bill, small to medium-sized cities that are deemed by the state to be financially distressed would lose all state aid if they file for bankruptcy protection before July of next year.

Many city officials are not happy.

“I just feel that he really handicapped us today to get us any further,” said City Councilwoman Patty Kim. “I didn't want to go into bankruptcy, but it was an essential tool to talk with negotiators. What do the bondholders and creditors care now? We can't file for bankruptcy so we have to do pretty much whatever they demand.”

Council President Gloria Martin-Roberts said she is hopeful council will approve the Act 47 plan and stay out of bankruptcy, which will render the Piccola bill meaningless anyway.

“The Act 47 team has not only been flexible, but very accommodating,” she said. “They do listen and I believe they bring the best interests of the community to the table and they really want this to work for the City of Harrisburg.”

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