What does this mean for me?
From the beginning, the many stakeholders in Harrisburg’s financial saga all have wondered what the receiver’s report would hold for their interests.
Well, the report is in–and what emerges are a few clear winners, a few clear losers and several groups tuck clear losers and several groups stuck somewhere in the middle.
The Mayor: By aligning herself so closely with the receiver, Mayor Linda Thompson set herself up to retain as much influence and power as possible. She has said that she’s “joined at the hip” with receiver David Unkovic, choosing cooperation as her best strategy. For his part, Unkovic has included Thompson in the process from the start and now has refunded her communications director, a position that he sincerely believes she needs. The plan for a new chief operating officers could be seen as an attempt to usurp some of the mayor’s power, particularly as the COO will lead the recovery plan’s implementation on a daily basis. Thompson, though, clearly regards the team. Only time will tell if she’s right.
City council: Councilman Brad Koplinski has said that the council believes the financial rescue process should have gone like this: “You go to the creditors first, then you sell stuff, then you raise taxes. (Unkovic) has done the opposite.” Yes, he has. And that’s why council may be regarded as a net loser under the plan the council now faces the option of either jumping on board the plan in total or defying it and losing in court, which is what is likely to happen with the battle over the city spokesman job.
City Treasurer, Controller: In office just two months, John Campbell has injected new spirit into the job of the city treasurer. The receiver’s report will help him further raise the office’s stature, as the treasurer is among the handful of officials tasked with guiding Harrisburg to solvency. Likewise, City Controller Dan Miller gets a prominent spot at the table, reversing Thompson’s efforts to shut him out over the past two years.
City Employees: If you’re a city worker, there’s a lot to dislike in the receiver’s report. Unkovic expects to cut costs largely by eliminating and trimming salary increases and slashing workers’ generous benefits packages, as well as adjusting some schedules and limiting off-days. He even threatens to lay off the city’s entire sanitation crew if outsourcing proves more cost-effective. Workers may insist that their unions simply refuse to cooperate by not re-opening their contracts. However, a court could force re-negotiation, as former Mayor Stephen Reed repeatedly extended contracts without council approval. Just last November, the Commonwealth Court said the city did not have to honor a 2008 contract extension between Reed and the city’s police union.
City taxpayers: It could have been worse, which may be the only comfort for city residents and property owners. Homeowners already have been socked with 8 percent property count out further hikes. In additon, it proposes raising the earned income tax rate to help close budget gaps. The receiver cannon unilaterally raise taxes, but may choose to petition the county Court of Common Pleas to up the EIT.
Business Community: The report is a mixed bag for city businesses. Some will balk at certain fee and tax hike proposals, while others will object to increases in parking rates and hours. The real estate community wanted a tax abatement program. Above all, though, businesses want some sense that the report is the beginning of the end of the city’s financial nightmare. If it is, businesses and investors that have muddled through the dark days could win big.
Commuters: The receiver’s report does not include a commuter tax, making a clear winner of those who work in Harrisburg and live elsewhere. At the moment, it appears all they’ll have to do is pony up a few extra quarters to park on the street.
City creditors: The report states that the receiver may seek concessions from creditors–or may even declare municipal bankruptcy to do so. Will he? The receiver’s report takes a methodical approach, basing many future actions on how much the city can get from selling the incinerator and leasing the parking garages. If assets price well, the city’s creditors may need to make few concessions.
