Pennsylvania Capital Faces Limbo of Missed Payroll, Bond Default, Takeover

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http://www.bloomberg.com/news/2011-09-02/pennsylvania-capital-faces-limbo-of-missed-payroll-bond-default-takeover.html

By William Selway - Sep 1, 2011 11:01 PM CT

Harrisburg’s City Council has left residents of Pennsylvania’s capital wondering what will become of their struggling community, one so broke it may miss payroll, skip bond payments and face a state takeover.

The council voted down a fiscal-rescue plan Aug. 31, the second time in as many months it rejected a proposed way out from under costs tied to a municipal incinerator that it can’t afford. Without an influx of cash, Mayor Linda Thompson has said the city won’t be able to issue paychecks and cover $3.3 million due Sept. 15 on its general-obligation bonds.

Detective Jason Brinker, the 38-year-old head of the city’s police union, said no one knows what’s coming next. The city may lose state aid if it doesn’t put a fiscal recovery plan in place by Sept. 6.

“It makes an already stressful job 100 times more stressful,” Brinker said in an interview in the union’s downtown office. “Now they’ve got to worry about, Can I pay the mortgage, can I keep the heat on, can I feed my family.”