What is this step called receivership under Act 47?

Seeking a better understanding of Pennsylvania’s issues and proposed solutions? Sometimes, complicated jargon and concepts can get in the way. That’s why we started Explainers, a series that tries to lay out key facts, clarify concepts and demystify jargon. Today’s topic: Pennsylvania’s distressed communities law (Act 47).

One in a series explaining key terms and concepts of Pennsylvania government.

Harrisburg’s involvement with Act 47 proved so tumultuous it led to a new, more intense level of intervention: receivership.

In this situation, the state appoints a receiver – a full-time position with enhanced powers to take steps to resolve a municipality’s fiscal problems.

After Harrisburg officials deadlocked over a recovery plan and bankruptcy filing attempts in 2010-11, Pennsylvania put its own capital city into receivership.

Commonwealth Court approval was needed; Harrisburg remains the only city where this has happened.

The logic behind the dire move was this: The failure of city officials to agree on a recovery plan constituted a fiscal emergency4.

Commonwealth Court approval is required for the receiver and the recovery plan.

The receiver  cannot unilaterally levy taxes, or modify debt, nor can the governor.

But they can however petition the court to force local officials to comply with the recovery plan until it’s approved by the court.

City Council members and other local elected officials in Harrisburg unsuccessfully sued the state in federal court over those provisions, claiming they violated their civil rights and prevented them from doing their jobs properly.

Receivership expires after two years unless DCED seeks and the court grants an extension.

 Footnote

4. Fiscal emergency: insolvency or an inability to provide vital services exists or appears likely within six months. Governor must declare.

Did this article answer all your questions about Pennsylvania’s distressed communities law? If not, you can reach Emily Previti via email at emily_previti@witf.org or through social media @emily_previti. Have a topic on which you’d like us to do an Explainer?  Let us know in the comment section below, or on Twitter @PaCrossroads.