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Mayor Thompson's top priority: Dire financial situation in Harrisburg

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Thompson, in late 2009, at a mayoral debate.

Linda Thompson was sworn in on Monday, January 4th as the 33rd mayor of Harrisburg. She has already made history by becoming Harrisburg's first female and first African-American mayor. With this distinction, a heavy burden is placed on Thompson's shoulders. She faces strong expectations, not only as the first female and first black mayor, but also as a mayor taking leadership over a struggling city.

Mayor Thompson has stated that dealing with Harrisburg's faltering economy and securing the City's financial stability is a top priority of hers. However, this will be an enormous feat.

The City of Harrisburg is in the grips of economic uncertainty. The 2010 budget and an analysis of the city's financial management by a consulting firm has revealed that Harrisburg may be facing bankruptcy in the months to come.

The major strain on the city's budget is the Harrisburg Resource Recovery Facility (RRF) or "incinerator" debt. A source of much debate and contention for months, the retrofitting of the Harrisburg RRF, which was essentially a major updating and replacement of plant components, amassed a debt of approximately $300 million - a debt that the city is still trying to pay off.

Throughout Fall 2009, there was talk of requesting Act 47 assistance, which would allow the State to declare Harrisburg a financially distressed municipality. Act 47 would provide debt restructuring and non-resident wage tax revenue to the City, but it is practically a stone's throw from declaring Chapter 9 bankruptcy. Though a few Harrisburg residents supported this course of action, Mayor Stephen Reed viewed Act 47 very unfavorably, as it would decimate Harrisburg's bond ratings, make future projects that much harder to fund, and would be disastrous from a PR perspective.

However, the 2010 budget did offer a few options to both create revenue and cut costs for the city. Tax increases, though not a preferable option, loom as one possible solution to Harrisburg's financial crisis. In addition, revenue may be created by selling or long-term leasing Harrisburg Parking Authority assets, the Resource Recovery Facility, and other city assets (such as City Island) to the highest bidder. The City may also face increased  business license fees or cuts in "non-essential services" like sports and recreational programs, city-wide events, and classes offered to the public.

City government has yet to take any course of action with respect to the debt, but Mayor Thompson plans to put an end to the inaction. She said at her inauguration that "all options are on the table" and that she "will make the tough decisions." Given the size of the task in front of her, this statement will most definitely be tested in the months to come.

For more info: See the City of Harrisburg's Official Website at http://www.harrisburgpa.gov/

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