A recent Pew Charitable Trusts study all but condemns Pennsylvania’s approach to assisting cities in fiscal distress.
But its recommendation to intervene early may be easier said than done because of the sheer number and variety of local governments in Pennsylvania, and the lack of state control over them.
A recent report from the Pew Charitable Trusts suggests the state’s Act 47 program is too reactive to successfully guide cash-strapped municipalities back to financial recovery. Of the 27 municipalities that have entered the program, it points out, only six have exited.
But it doesn’t help that the commonwealth has an unusually large number of local governments — and it treats them with a deference you won’t find in places such as Virginia, North Carolina and Maryland.
Many local governments have laypeople reporting municipal finances to the state — and they don’t have to use a standardized method, according to Fred Reddig of the commonwealth’s Department of Community and Economic Development and a special assistant for Act 47.
“One of the issues that our office struggles with is the quality of the information,” he said. “Now, when we have the CPA report, we have greater confidence in the data that is in that report than we do necessarily in some of the reports that come in from elected auditors.”
Some say tightened laws on financial reporting could help.
A state legislative task force is studying potential remedies to the Act 47 program and will issue recommendations this year.