Pennsylvania's capital city voted to file for Chapter 9 bankruptcy protection on Tuesday as it faced a state takeover, according to media reports.
The City Council voted 4-3 to seek bankruptcy protection for Harrisburg, which has a debt burden five times its general-fund budget "because of an overhaul and expansion of a trash-to-energy incinerator that doesn’t generate enough revenue," Bloomberg Businessweek reported.
The bankruptcy means the city will lose state aid, but that is better than the proposed recovery plans, Councilwoman Susan Brown-Wilson said, according to Bloomberg. But State Sen. Jeffrey Piccola, a Republican from Dauphin County, where Harrisburg is located, said the council's vote is against the law.
“I have been on the record as saying that bankruptcy is simply not an option. It’s illegal under Pennsylvania law, which prohibits third class cities from filing for bankruptcy,” Piccola said, according to PennLive.com.
Patty Kim, who voted against bankrupcy protection, said the city cannot afford the high cost of litigation that will likely ensue.
“The problem still exists that we still don’t have money, and we still haven’t moved one foot forward,” Kim said.
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