PENNSYLVANIA’S STATE CAPITAL, HARRISBURG HAS 50,000 people domiciled in its 8-sq.-mile area and is protected by four fire stations and a total of only 16 firefighters on duty. Like many other cities, Harrisburg has been suffering financial distress recently and the precarious state of its ability to function was further shaken last week when Mayor Linda Thompson made a deliberate decision to default on an upcoming bond debt payment.
The bond is question is a $288 million loan for an incinerator project and a debt payment of $3.29 million is due on September 15. Mayor Thompson said last week that her unilateral decision to renege on the debt payment is a direct result of the City Council’s February rejection of her budget proposals to raise property taxes and water rates. She added at the time, “I cannot shut down fire. I can’t shut down public safety. If I can’t make a bond payment, there are measures set up in those agreements to guarantee reimbursement (to bondholders). And that was the decision we made. …”
However, the mayor announced yesterday (Thursday) that she will have to lay off more city workers and close a fire station in order to close a $4.1 million budget gap that has nothing to do with the debt crisis. This stunning reversal in just one week caught the city council by surprise and blindsided the fire chief, who was appointed by Thompson. Thursday night the city council’s public safety committee held a meeting and invited the fire chief along with the firefighters’ union president to testify. Their responses are documented in the video report from WHP-TV Ch. 21:
The bond debt default moves the city closer to bankruptcy and some council members have already publicly asked for considerations into exploring the action. If they fail to make the debt payment next week, they will most likely be unable to borrow any funds for anything afterwards.











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