PA Gives Capital City $4.4 Million, Says It’s Not a Bailout

As some Democrats are learning, bailing out banks and corporations is unpopular. So when Democratic Pennsylvania Governor Ed Rendell decided something needed to be done to save PA’s struggling capital city of Harrisburg from declaring bankruptcy, he avoided using the term. Instead, the $4.4 million the state provided to the city has been dubbed “expedited” funding.

In the spotlight is $3.3 million the city owes in bond payments this week that it can’t pay, a deficit of $4.3 million, and an almost 40-year incinerator project that doesn’t generate enough revenue to cover the $288 million debt it has caused. This year alone, the city owes $68 million for the project — more than its annual budget.

To save the almost-bankrupt city, Rendell decided to move up $2.6 million in funds slated for municipal-pension assistance and $987,000 for fire protection. In addition, the city will receive $850,000 in grants to pay a financial advisor. Of the money given, only $500,000 is required to be paid back.

In a city of only 47,000, the average amount of debt per person is just over $91,000 if one divides the $4.3 million deficit by the population. That’s a tall order considering that over a quarter, nearly 30 percent, of the city’s residents live below the poverty level.

The recent handout may just be a temporary fix, however. Another bond payment is due in March, and unless city leaders can figure out how to raise money or lower expenditures, another round of “expedited” funds could be in order.

Before the state aid was announced, Harrisburg Mayor Linda Thompson proposed closing a fire station, laying off city workers, increasing parking fees, and simply ignoring bond obligations. And it was learned after the state aid deal was reached that the city would have missed payroll by $500,000 dollars.

Harrisburg is not alone in its bond debt problem. Cities across the country are bogged down with muni bond debt that threatens local economies.

“Stories like that have become frustratingly common around the country,” writes Steve Malanga in a lengthy expose on the problem in this summer’s City Journal. “State and local borrowing, once thought of as a way to finance essential infrastructure, has mutated into a source of constant abuse.”

Comments (67)

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  • Dan in P.A.
    Posted on September 13, 2010 at 1:55pm

    They will spend until it hurts ; not them us may we please learn our lesson

    Report Post »  
  • Dan in P.A.
    Posted on September 13, 2010 at 1:52pm

    As he drinks his last gallon of cool aid we will overcome . He will not stay her . My prediction

    Report Post »  
  • lastmanstandin
    Posted on September 13, 2010 at 1:13pm

    I say if you even say the name of the stste your suppose to be representing you have no place in the state gov. HEY ED its pronounced PENCILVANIA not pensivana. get it right you dolt.

    Report Post »  
  • Lion420
    Posted on September 13, 2010 at 1:03pm

    This guy makes me sick. I live in his state, he appears on sports shows all the time, talking about the Eagles, or the Phillies…meanwhile none of the morons around here have a clue about what he’s doing to us. I try to tell peeps about these things, like when he was preventing he Military ballots from being counted back in 04, but they think I’m nuts.

    Report Post » Lion420  
  • JesusFreak95
    Posted on September 13, 2010 at 12:43pm

    This just makes me sick. We are delaying the inevitable by paying the Govt. cronies while our state is going down for the third time in debt. Not only that, but this idiot has allocated 10Million EACH for libraries/museums for Specter and Murtha, when we can even pay our regular bills. The man is despicable, and so is the state legislature that keeps “cooperating” with him. The PA state debt has SOURED under Rendel. I’m sure the “financial adviser” is related to him in one way or another. Why on earth would you spend $850K when you can’t even pay your bills. I’ll tell you how to solve the problem for free. STOP SPENDING OUR MONEY ON B.S.

    Report Post » JesusFreak95  
  • SGTTAZ67
    Posted on September 13, 2010 at 12:38pm

    To be fair, Harrisburg inhetited this from previuos administrations. The Incierato was started a Long time ago. Typical union stuff held it up. Now it‘s finished amd deosn’t meet the new environmental codes. I didn’t vote for Fast Eddie. All he’s done is make it legal to ride your motorcycle with no helmet to a casino, provided you don’t get stuck in a snow drift on the interstate. Could someone please clone Christie and have the clone move next door ?

    Report Post »  
  • pavnvet
    Posted on September 13, 2010 at 12:09pm

    Rendell has nothing to lose for this blatant act of theft of State funds. Every Pennsylvanian (with the exception of Harrisburg municipal employees) should march on the State House and demand that the money not be spent. $850,000 for a financial adviser? Who are they kidding? Here is some free financial advice, don’t spend more than you could ever take in. Go bankrupt, Lose all the ridiculous salaries and legacy costs and start with an austere budget that provides just necessary services.

    Hopefully we here in Pennsylvania will regain our State and our sanity back in November when Tom Corbett is elected. I also hope that supposed Blue Dog Democrat Carney in the 10th, who voted 91% of the time with Pelosi is shown the door.

    Report Post » pavnvet  
  • lastmanstandin
    Posted on September 13, 2010 at 11:58am

    Well you notice lately he has plastered his face on all the tv opinion shows FOX included. I don‘t know why anyone gives this F ’n loser the time of day.

    Report Post »  
  • lastmanstandin
    Posted on September 13, 2010 at 11:56am

    i live in western PA and i want to know why it’s ok for these criminals and the rest like them can say
    ” well we just won’t pay our obligation.” I’m struggling to pay my bills if I were to say that they would come take every thing i own and put me in jail. What a state we live in ..

    Report Post »  
  • hempstead1944
    Posted on September 13, 2010 at 11:50am

    Fast Eddy has been screwing the folks of PA so long, they don’t even feel it anymore….Pity them for putting up with this scam artist for such a long long time…..He would make a good Chicagoan……

    Report Post »  
  • Light of Liberty
    Posted on September 13, 2010 at 11:39am

    Governor Spendell does it again, thank goodness he’s going to be ending his reign soon, not soon enough to save the state. This will only make PA’s shortfall more than it is already.

    Report Post » Light of Liberty  
  • nostromo
    Posted on September 13, 2010 at 11:39am

    Interesting I read about this here and not in my hometown PA newspaper.

    Report Post »  
  • wrayjl81
    Posted on September 13, 2010 at 11:20am

    is this any suprise to anyone such as myself who lives in this state that he has run to the ground. Property tax relief promises that have never happened, sending millions to philly, lack of good paying jobs to keep pennsylvania grads here, oh and a state legislature that gets a $150 or more a day allowance for food while session and if they don’t spend it, they get to keep it, Only in Pennsylvania.

    Report Post »  
    • lastmanstandin
      Posted on September 13, 2010 at 1:07pm

      We as Pennsylvanians need to band together and get rid of these perks, make it so that the only people in the PA gov’t are the ones there for the right reason not for the perks.

      Report Post »  
  • IX-XI
    Posted on September 13, 2010 at 11:17am

    Hey, hey, now you’re in my backyard. Here in York county, the city of York is in a pickle of its own. But it’s in FAR better shape than Hburg.

    Here the problem is, all the rest of us surrounding York won’t cough up a dime for the corrupt, stupid York bureaucracy.

    York is beyond help, while the townships are rolling in dough. Our schools are in pretty good shape, our jobs picture is as good as anywhere in the country, our infrastructure is…well, it is what it is. And the villages and townships are continually facing shakedowns from the city. Every time they try to squeeze us for more cash, we wind up further isolating York from us, cutting every possible tie that could be used to tax us for York’s stupid decision making.

    Harrisburg? It’s York times five. The jokers running that city long since abandoned any effort to make outlays resemble income. They were screwed BEFORE the recession hit.

    Now they’re a joke.

    Look at your electoral map. Notice how red PA looks. We‘re on track to pick up at least FIVE House seats plus a senate seat and a governor’s mansion in 50 DAYS. PA is ground zero in the Republican wave, and Rendell’s Harrisburg shenanigans epitomize why.

    F you very much, fast Eddie.

    Report Post » IX-XI  
    • sharj
      Posted on September 13, 2010 at 11:32am

      I am from the southern end of York, just heard the other day that York is spending a few million to clean up downtown area. Why? hire people to sweep and plant a few flowers. that could be maybe a few hundred $$. York has no money to spend! our taxes down in our area are becoming so high, I am not sure how we will be able to afford our taxes on our 100 year old home in the near future.

      Report Post »  
    • IX-XI
      Posted on September 13, 2010 at 2:00pm

      sharj, I’ll not get more specific about my exact location, except that the new intermediate school has had a rather direct impact on my family.

      You and I have much in common. I’m just fine with our Congressman–we could have it better, but we could sure do a lot worse. I’m proud of PA, as the state able to WAKE UP to our awful situation before we’re California or New York. If the rest of the country can do the same, we can be sitting pretty sucking the rich businessmen out of those states by establishing low-tax regimes like Texas.

      If they hate the rich so bad, we‘ll be happy to take ’em off their hands.

      Report Post » IX-XI  
  • beekeeper
    Posted on September 13, 2010 at 11:01am

    You know, when I frist read the headline, I thought Sean Penn gave $4.4 Million of his own money to Hugo Chavez, but then I realized – liberals don’t use their own money to help others…

    Report Post » beekeeper  
  • beekeeper
    Posted on September 13, 2010 at 11:00am

    Why are so many capital cities so poorly managed? Harrisburg, Detroit, and (of course) Washington, D.C.?

    From the above article:

    “In a city of only 47,000, the average amount of debt per person is just over $91,000 if one divides the $4.3 million deficit by the population. That’s a tall order considering that over a quarter, nearly 30 percent, of the city’s residents live below the poverty level.”

    Report Post » beekeeper  
  • beekeeper
    Posted on September 13, 2010 at 10:55am

    So Ed Rendell gave Harrisburg an advance on monies it was slated to get – how does this help in any way except in “kicking the can” down the road a bit? This increased the debt o fthe city by $500K (the amount they have to repay), and next month Harrisburgh will have to make the same payments AGAIN, will they then get an advance on the following months “allowence” from the state? Has anyone involved in this episode considered that Harrisburg has a fundamental funding problem and they need a real solution, not monthly “kick-the-can” advances on monies owed it from the state?

    Report Post » beekeeper  
  • grnhrn
    Posted on September 13, 2010 at 10:48am

    Boy to be the financial adviser

    Report Post »  
  • sbenard
    Posted on September 13, 2010 at 10:42am

    Ed Rendell must be the only soul in Pennsylvania that doesn’t see this as a bailout! Who’s the fool? Rendell or the people of Pennsylvania!

    Report Post » sbenard  
    • sharj
      Posted on September 13, 2010 at 11:35am

      this seems to be a democrap state, so guess it would be the democraps.

      Report Post »  
  • Debrabate
    Posted on September 13, 2010 at 10:32am

    And this is suprising to anyone because…..???????

    Report Post » Debrabate  
    • poppopschell
      Posted on September 13, 2010 at 10:39am

      A perfect illustration of what Beck says about making up words that is spinning a word that the people hate such as bailouts. FYI, Rendall was Mayor of Philly one of the most corrupt and bankrupted cities in the USA. Always loom at a person’s words in context of their past actions. Great advice given by Glenn.

      Report Post »  
  • v.o.t.e.
    Posted on September 13, 2010 at 10:30am

    by the way—v.o.t.e. stands for vote out the encumbents– its a play on words with incumbents being encumberances to our freedom

    Report Post »  
  • KEA
    Posted on September 13, 2010 at 10:20am

    Not just the Gov. but what about the city councel who aproved all this spending that got them in this mess.

    Stand up for whats RIGHT! THROW them out of office!

    Report Post »  
    • sharj
      Posted on September 13, 2010 at 11:26am

      I agree! fast eddie has wasted his share of money and provided FRIENDS with overpaid created jobs in PA. He is an outrage.

      Report Post »  
  • MikeinIdaho
    Posted on September 13, 2010 at 10:10am

    Hey Pennsylvania, do you think this is a good idea? Are you making any noise about it? Rendell is a slimy marxist politician of the first order. What are you going to do about him?

    Report Post » MikeinIdaho  
    • richierich
      Posted on September 13, 2010 at 10:21am

      He’s really turned out to be a political hack. However, he is an Eagles fan…

      Report Post »  
    • Mandiru
      Posted on September 13, 2010 at 10:23am

      It‘s really a shame that Chris Christy couldn’t come run this state after he finishes fixing Jersey. Really though, how can people continue to elect someone like Rendell? Or that Thompson chick?

      Report Post » Mandiru  
    • v.o.t.e.
      Posted on September 13, 2010 at 10:23am

      it would have been a good idea if it had been attached to mandatory cuts in city union spending and jobs—period– we have to start using the leverage we have now to rien in bloated gov jobs , benefits and pension plans– i don’t make noise about things — i try to come up with doable solutions

      Report Post »  
    • sharj
      Posted on September 13, 2010 at 11:21am

      I am from the York, PA area and in my opinion can’t get fast eddie out of this state fast enough. Don’t know enough about mayor of harrisburg, but time will tell. I am not happy about her cutting firefighters first, but that seems to be the leverage used to get their wasteful spending.

      Report Post »  
    • casey1
      Posted on September 13, 2010 at 11:44am

      He is going into retirement and this is his goodby present to the unions of Harrisburg.

      Report Post »  
    • hempstead1944
      Posted on September 13, 2010 at 11:52am

      You are talking to the deaf……..the folks in PA have become like the folks in Illinois.

      Report Post »  
    • brandonhxc
      Posted on September 13, 2010 at 1:37pm

      I”m from south-central PA and I’m so glad to see this fool go this year. I really wished he wouldn‘t have given us this big middle finger right before he’s about to leave office in shame. As if he hasn’t made it bad enough for us already

      Report Post » Brandon  
    • e poli
      Posted on September 13, 2010 at 7:05pm

      encourage everyone you know to vote and vote all the dems out of office!

      Report Post »  
    • patriotj
      Posted on September 14, 2010 at 4:18pm

      This is Thompson’s first term. The idiot that she replaced was also very shady and had under-the-table dealings with a lot of people. I am so glad that I don’t live in Harrisburg. The place is a cesspool and going down the drain very quickly.

      Report Post » patriotj  
    • bronson0
      Posted on September 14, 2010 at 4:36pm

      It is funny to hear that Rendell actually cares about a city in PA other than Philly! (Anyone from Pittsburgh knows that!)

      Anyway, he is gone soon. He is term limited and will be gone next year!

      Report Post »  
  • v.o.t.e.
    Posted on September 13, 2010 at 10:10am

    lets take the all american high road on the ground zero mosque– we should start a movement to build a non denominational church,synagogue and a mosque at the ground zero site as a celebration of america’s perfect religious tolerance–thoughts

     
    • MikeinIdaho
      Posted on September 13, 2010 at 10:15am

      I vote we build a Synogogue and a Cathedral next to that big rock at Mecca. how about that for “tolerance”?

      MikeinIdaho  
  • v.o.t.e.
    Posted on September 13, 2010 at 10:08am

    Add your comments

    Report Post »  
    • casey1
      Posted on September 13, 2010 at 11:22am

      Fast Eddie pulled another on on the taxpayers of PA. Let the city go into bankruptcy. He is doing it to “protect” the unions.

       
    • Beckofile
      Posted on September 13, 2010 at 1:12pm

      Can you say summer of Wreckovery.

      Report Post » Beckofile  
    • Beckofile
      Posted on September 13, 2010 at 1:16pm

      $91,000 Per Citizen just for the city debt. 30% of them below the poverty level. There is no possible way to pay it back. Move fast from that city…..oh our cities are about the same. What is the share of the state debt per citizen? What is the share of the Fed’s debt per citizen? So unsustainable and just a madoff of time before it comes crumbling down.

      Report Post » Beckofile  
    • thirtyfive
      Posted on September 13, 2010 at 9:16pm

      this man is not on our side he needs to come back to earth if they would clean there own house they would have all the money they need. we adjust they can

      Report Post » thirtyfive  
    • RUKiddingMe
      Posted on September 14, 2010 at 1:18am

      Voting can’t come soon enought to stop solicialist from spending. Just shows how liberal/socialist states keep getting further in debt trying to spend their way out…it will never happen. Rendell should be firing Union Workers, Government employees, etc….to save money instead he puts the burden once again on the taxpayers. Maybe next election they will get smart enough to vote him out.

      Report Post »  
    • patriotj
      Posted on September 14, 2010 at 4:16pm

      RUKiddingMe-
      Thank God for term limits! He cannot run in the next election since he has already served his two terms. Really, in PA, unless you live in Pittsburgh or Philadelphia you don’t count. This is true on the state and federal level.

      Report Post » patriotj  
    • thatzwhatithink
      Posted on September 14, 2010 at 5:18pm

      The governor that never met a tax increase he didn’t like, is practicing. He has high hopes of joining the Obama Nation when is done in Pennsylvania. The more handouts he can put on his resume by January the shorter the vetting process

      Report Post » thatzwhatithink  
    • Conservitarian
      Posted on September 14, 2010 at 10:59pm

      I think most people agree that when they are confronted with a problem and find a solution, if they are confronted with the same problem again, the first reaction is to try the method that worked before to solve the issue.

      So will someone please explain to me why politicians do not use methods that have already been proven to solve certain problems. For example, both Reagan and Kennedy cut taxes to solve their budget woes. In both cases, the amount of tax money collected by the government increased. Why you ask? Research the Laffer curve.

      Obama inherits a bad economy, much as Reagan did. Reagan solves his problem, yet Obama uses a strategy of polar opposites. Rendell is simply following the Progressive model of the day, bailouts/takeovers/socialism.

      Report Post »  
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