Harrisburg’s MLK City Government Center
Harrisburg’s finances are “stable,” but the city faces considerable challenges moving forward, according to a recent report from a state-appointed financial board.
On Tuesday, the Intergovernmental Cooperation Authority (ICA) submitted its annual report to the commonwealth, offering a generally positive view of the city’s finances, but noting several concerns and, especially, urging the city to move ahead aggressively on developing an economic development plan.
“In the report, the ICA finds that the City of Harrisburg’s financial condition is currently stable, with progress toward many individual objectives,” according to the ICA, tasked since 2018 in helping to oversee Harrisburg’s financial progress. “The report, though, continues to advocate for a more comprehensive approach to economic redevelopment, as well as work toward reentering the credit marketplace.”
The report emphasizes three issues of note.
First, it “encourages” the city to work with other stakeholders, including businesses, residents, developers and neighborhood groups, to “adopt and implement a wide-ranging economic development strategy.”
“Such a plan would help significantly with the city’s vitality and preventing future downturns in the local economy,” according to the ICA.
The ICA, in its report, states that the city is the preferable entity to lead such an effort and that, in fact, the city administration has begun to put together a working group to develop a plan.
Secondly, on a related note, an economic development plan would help address the negative impact of the post-pandemic local economy, as many state and other office workers now work remotely. These impacts include higher commercial vacancy rates, reduced property taxes, less parking revenue and lower income from worker taxes.
Thirdly, the ICA remains “concerned” that the city maintain adequate fund balances both in its general fund and its neighborhood services (sanitation) fund. For years, the ICA has urged the city to improve its collection of sanitation fees, which it repeats in its current report.
The ICA stated all three of these issues as “areas of concern” in last year’s report, as well.
In the current report, the ICA notes that city is on “the cusp” of exiting from Act 47, the state’s program for financially distressed municipalities. However, it’s been prevented from doing so because of ongoing, unresolved litigation involving the city’s former incinerator, which it sold in 2013 as part of the recovery plan from its financial crisis.
Once the longstanding litigation is resolved, the city would be able to quickly exit Act 47, an important step to be able to re-access the credit markets, which it’s been unable to do since entering the program about 15 years ago.
“The board members of the ICA remain committed to bringing their diverse backgrounds and experience to help the city promote growth and sustainability,” said ICA Board Chair Doug Hill, in a statement. “Working together, we know that the possibility of prosperity lies ahead.”
To view the full report, visit the ICA website, click “Resources” and then download the PDF at “Authority Section 203 Annual Report of City of Harrisburg Finances FY 2024.”
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