VA Adopts Early Warning for Distressed Munis: How Does PA Compare?

VA Adopts Early Warning for Distressed Munis: How Does PA Compare?

An article from the National Conference of State Legislatures (NCSL) on state level early monitoring of local government fiscal distress looked at the efforts of Virginia in its last legislative session to adopt an early warning system and intervention procedures.

The article cites a 2016 study on what states do in regards to discovering if their local governments are headed toward financial distress.  At the time of the study it noted that 22 states did monitor local government finances and eight of those fell into a typology of fiscal monitoring with early warning.  Pennsylvania was one of these, and its neighboring states of Ohio and New Jersey were also in the group.

In the case study portion of the report, the process of municipalities submitting annual financial data to the Department of Community and Economic Development was noted and the addition of early intervention language to Act 47 through amendments in 2014 (Act 199) was pointed out, with that language coming into play for 80 local governments and for five that eventually did enter Act 47 status.