Harrisburg’s Plan B

In a recent blog we noted how Harrisburg’s City Council said "no thanks" to the proposed recovery plan its state-appointed Act 47 coordinator had written. Of course, rejection does not mean the state folds up its tent and the Act 47 status disappears. According to Act 47 rejection in a home rule or optional plan municipality (which Harrisburg is) it is incumbent upon the municipality’s CEO to develop a plan within two weeks time.

So what is in the alternative plan? Asset sales, including off-loading the problematic trash incinerator and parking garages, are on the list. The Mayor also wants payments in lieu of taxes from tax-exempt facilities, and with the City serving as the seat of state government that hinges on the Governor and the General Assembly increasing its payments to about $5 million annually.

There is a commuter tax, which, as we have pointed out before, is a misnomer because an increase in the earned income tax under Act 47 falls on residents of the distressed municipality as well as those that work there.

The Mayor is not going to pursue a countywide 1% sales tax a la the Regional Asset District Tax or the add-on in Philadelphia (which is now up to 2 points) because "of the unlikely success of such a passage of such a law" according to the Mayor’s statement at the beginning of the alternative plan.