Harrisburg Hoping God Can Help Balance the Books

Jan Stromme | Riser | Getty Images

If all the brightest minds in Harrisburg’s government can’t solve the city’s financial problems, maybe God can.

That seems to be the thinking in Pennsylvania’s capital city, where Mayor Linda Thompson and a host of other religious leaders are about to embark on a three-day fast and prayer campaign to cure the city’s daunting money woes.

Maybe Greece should have thought of this.

“Things that are above and beyond my control, I need God,” Thompson told WHTM TV, the region’s ABC news affiliate. “I depend on Him for guidance. Spiritual guidance. That’s why it’s really no struggle for me to join this fast and prayer.”

But judging by its financial picture, the city of 49,000 in the central part of the Keystone State may not even have a prayer.

According to a recent analysis from the state’s Department of Community and Economic Development, Harrisburg is likely to end the year with a nearly $3.5 million deficit in its $58 million budget, and things are only expected to get worse.

By 2015, the deficit is likely to be $10.4 million, which will eat up about 16 percent of the city’s general fund budget.

It can’t be much surprise, then, that the city finds itself essentially as a ward of the state under the auspices of Act 47, a receivership program that is basically the final firewall between the capital city in the nation’s sixth-largest state and bankruptcy court.

“The City of Harrisburg is facing a direct, immediate and grave financial crisis,” the DCED wrote in a massive 422-page analysis of the government’s perilous condition. “The financial crisis is so severe that the City teeters uncomfortably on the verge of bankruptcy that could be triggered at any moment by parties outside its control.”

The study further warns of possible “catastrophic results” in which bankruptcy might come from “the stroke of a judge’s pen.”

And they wonder why Meredith Whitney is worried about municipal debt defaults.

Harrisburg’s financial problems are multi-pronged but stem primarily from a disastrous 2003 incinerator project that was supposed to be a revenue driver but instead ended up costing millions in cost overruns and malfunctions. As a result the city still owes $220 million on the bond issue. The debt service on that project alone is $18 million per year, which amounts to nearly one-third of the entire 2011 budget.

In short, irresponsible public spending combined with crippling fixed costs and an inability to grow have sent Harrisburg’s leaders to their knees in search of spiritual guidance—and perhaps a little extra generosity from the collection plate.

If this is all sounding very Greek—and, yes, American—it should.

Greece’s Prime Minister George Papandreou may feel like dropping to his knees and asking the heavens to bail the country out of its debt-induced mess. But he’s no more likely to find success than anyone in Harrisburg.

While repeated efforts from CNBC.com to reach Thompson were unsuccessful, a statement from her office reported by Reuters said the praying and fasting will include a contingent of about a dozen Christian, Jewish and Muslim religious leaders. Some locals interviewed by media said the effort might help.

But the sentiment of Harrisburg residents—and likely many of those storming the streets in Athens—appeared to be summed up by one resident interviewed by WHTM.

“I’m not starving myself for Harrisburg,” said Jori McElwe of Middletown. “No way.”


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