Greater Harrisburg's Community Magazine

State oversight body issues largely positive report on Harrisburg’s financial condition

Harrisburg’s MLK Jr. Government Center

Harrisburg’s fiscal condition is “sound” and its budget is in surplus, according to a largely positive annual report issued by the city’s financial oversight body.

The Intergovernmental Cooperation Authority for Harrisburg (ICA) issued its second annual report on Friday to the governor and legislature, stating that the city is in generally good financial shape.

“The report acknowledges a number of areas where progress has been made, while also identifying several priorities for improvement in fiscal management,” according to an ICA press release.

In 2018, the state created the ICA to oversee the creation of a five-year financial plan for Harrisburg.

The 26-page report submitted on Friday is substantially more positive than last year’s annual report, which robustly criticized the city for several alleged financial and accounting deficiencies.

Some of those criticisms—including a “low collection rate” in accounts receivable in the city’s Neighborhood Services Fund (sanitation), an outmoded IT infrastructure and a long-delayed audit of the city government’s physical assets—remain in the 2021 report.

In addition, the city has not hired a new finance director since former director Bruce Weber resigned last year, and the city and the ICA have not yet ratified an intergovernmental cooperation agreement between the two bodies, the report stated. Harrisburg and the ICA recently have moved towards final ratification of that agreement.

Nonetheless, the report said that the city is financially healthy as per a revised five-year financial plan for Harrisburg, which the ICA approved in March.

“The plan projects a stable fiscal position, with a solid general fund balance and relatively resilient revenues in spite of the global pandemic and economic crisis,” according to the report’s executive summary. “It also provides for important initiatives, including funding for capital needs and restructuring debt obligations.”

Moreover, last year, the state legislature extended the city’s extraordinary taxing authority, which was due to expire in 2025.

“The city received a major lifeline this year with the extension of the temporary taxing authority by the governor and the General Assembly,” said ICA Chair Audry Carter, in a statement. “We are committed to our work with the city to develop business practices that continue to sustain the confidence of the governor and the General Assembly.”

As a result of the city’s progress, it is on “the cusp” of being able to exit Act 47, the state’s program for financially distressed municipalities, according to the report. Harrisburg has been in Act 47 since 2010.

Recently, Mayor Eric Papenfuse told TheBurg that he expects the city to exit Act 47 this summer.

The report paints a cautiously optimistic outlook for Harrisburg’s financial state, a sentiment reiterated by Carter.

“Working together, we know that the possibility of prosperity lies ahead,” Carter said.

For more information on the ICA or to read the full report, visit their website.

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