Harrisburg seeks restructure; Act 47 aims to remove incinerator debt

By Devika Patel

Knoxville, Tenn., Aug. 24 -Harrisburg is weighing a debt restructuring, which seeks to eliminate much of the debt the city accumulated when it borrowed $125 million to build an incinerator, which ended up costing it $288 million in debt.

In an Aug. 23 meeting with the city's council, mayor Linda Thompson urged members to support her Act 47 Recovery Plan, filed with the city clerk on Aug. 2, which has been debated amongst city government, largely due to its inclusion of a commuter tax. She is also proposing selling the incinerator and leasing the city parking system.

In her speech to city council, Thompson told members: "Each of us is part of the solution, or each of us is part of the problem. The city knows this, we all know this. I have made no significant changes in the mayor's recovery plan since our last meeting. I won't add a 1% sales tax because, as appealing as it appears, it is simply not possible. ... I am keeping the commuter tax, as a last recourse, because it is possible under Act 47... If necessary, I will appeal to the court for taxation and I expect to win that appeal; but only if it is absolutely necessary for the city. ... vote yes for my plan and I will move forward with that negotiation, and all other negotiations, to eliminate the incinerator related debt in full."

The council will hold a meeting Aug. 31 for a final vote on the plan.

The mayor had previously acknowledged the full extent of the problem.

"The debt is beyond the city's ability to pay - more than $300 million, with millions more in lawsuits and penalties on top of that. The deficit is also unmanageable. The city will be out of cash with a deficit of more than $5 million in about 120 days," Thompson said in an Aug. 3 speech.

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