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What Happens When a City Budget Gets Rejected?

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So the City’s 2015 budget proposal was rejected by the oversight board yesterday.  That means the City gets 15 days to submit a revised plan and then, after it is submitted, “the [oversight board] shall determine whether the revised plan satisfies the criteria set forth in subsection (g)(1)”.  That subsection of the law states that the oversight board has to review each financial plan, operating budget, and capital budget and that there are “prudent, reasonable, and appropriate assumptions” and that the operating and capital budgets are consistent with the financial plan.

But what happens in the rare event that the City’s resubmission of the plan after the 15 day period is rejected by the oversight board?  The law directs the oversight board to notify the state, which is empower to withhold funds to the City (with certain exceptions) and place them in escrow until the oversight board members determine that whatever caused the non-compliance with the plan is no longer doing so and the state action is halted.

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Allegheny Institute
Allegheny Institute

The Allegheny Institute is a non-profit research and education organization. Our mission is to defend the interests of taxpayers, citizens and businesses against an increasingly burdensome and intrusive government.

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