Financially Distressed Municipalities Act

The Financially Distressed Municipalities Act (Act of 1987, P.L. 246, No. 47), also known as Act 47, is a Pennsylvania statute outlining procedures to stabilize municipalities in Pennsylvania undergoing financial distress. The Act empowers the Pennsylvania Department of Community and Economic Development to declare certain municipalities as financially distressed. It provides for the restructuring of debt of financially distressed municipalities, limits the ability of financially distressed municipalities to obtain government funding; authorizes municipalities to participate in federal debt adjustment actions and bankruptcy actions under certain circumstances; and provides for consolidation or merger of contiguous municipalities to relieve financial distress.

History

Most provisions of Act 47 initially remained suspended until the termination of the Pennsylvania Intergovernmental Cooperation Act (Section 708 of Act 1991, June 5, P.L. 9, No 6).

The cities of Erie and Altoona, among others, have narrowly avoided Act 47 designation. Their mayors seek legislative changes to the binding arbitration rules of Act 111, as well as a reduction in the designation of tax-exempt properties, to improve their financial health.[1]

Benefits of Act 47

Although some municipalities (listed in the chart below) have had the Financially Distressed designation removed, most cannot afford to lose the benefits Act 47 provides.[2] The benefits include revenue from the nonresident wage tax available only to cities with Act 47 status.[2]

Distressed municipalities

The following municipalities were designated as part of the Municipalities Financial Recovery Program as of the date indicated. Any dates of imposition and lifting of sanctions, and the rescinding of the initial designation are also noted.

Municipality County Designated Sanctioned Sanction rescinded Designation rescinded
Aliquippa Beaver December 22, 1987
Altoona Blair April 1, 2012 September 13, 2017
Ambridge Beaver April 10, 1990 April 16, 1993
Braddock Allegheny June 15, 1988
Chester Delaware April 6, 1995
Clairton Allegheny January 19, 1988 November 24, 2015
Colwyn Delaware May 6, 2015
Duquesne Allegheny June 20, 1991
East Pittsburgh Allegheny November 13, 1992 December 27, 1999
Farrell Mercer November 12, 1987
Franklin Cambria July 26, 1988
Greenville Mercer May 8, 2002
Harrisburg Dauphin October 20, 2010
Homestead Allegheny March 22, 1993 March 28, 2007
Johnstown Cambria August 21, 1992
Millbourne Delaware January 7, 1993 March 20, 2014[3]
Nanticoke Luzerne May 26, 2006 August 24, 2015
New Castle Lawrence January 5, 2007
North Braddock Allegheny May 22, 1995 April 11, 2003
Pittsburgh Allegheny December 29, 2003 February 12, 2018
Plymouth Luzerne July 27, 2004 May 3, 2016
Rankin Allegheny January 9, 1989
Reading Berks October 14, 2009
Scranton Lackawanna January 10, 1992 January 1, 1999 November 22, 2002
Shamokin Northumberland June 16, 2014
Shenandoah Schuylkill May 20, 1988 April 16, 1993
West Hazleton Luzerne March 27, 2003 October 21, 2014
Westfall Pike April 14, 2009 October 12, 2014
Wilkinsburg Allegheny January 19, 1988 November 10, 1998
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References
  1. "Strength in many voices". GoErie.com - Erie, PA. Retrieved 26 May 2015.
  2. "Philadelphia company to guide Reading through Act 47". readingeagle.com. Retrieved 26 May 2015.
  3. Delaware County Times
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