Harrisburg Receiver Lynch files recovery update - abc27 WHTM

Harrisburg Receiver Lynch files recovery update

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A year after Harrisburg Receiver William B. Lynch took over the city's finances, he said there is still a long road to a full recovery.

On that road, there's bound to be bumps, like the current projected deficit in Harrisburg's annual budget. But even with the state behind the wheel, Harrisburg runs into a sinkhole now and then.

The greatest re-route was then-Receiver David Unkovic's abrupt exit this time on year ago. During an impromptu press conference, a disheveled-looking Unkovic was shaking as he uttered, "All I know is I'm dealing with a lot of public officials who have lots of agendas."

That was on March 28, 2012. Ironically, Lynch filed his latest recovery status update to Commonwealth Court on March 28, 2013 – one year later.

Lynch said his greatest achievement thus far is bringing city leaders together.

"That whole spirit of cooperation is far better I think then it used to be," said Lynch. "I'm very proud of that."

Cooperation between Mayor Linda Thompson and City Council led to both finally agreeing to double the Earned Income Tax for 2013 from one percent to two percent. Last fall, Commonwealth Court Judge Bonnie Leadbetter ruled the increase would go toward vital city services.

While those tax dollars will begin to trickle in shortly this quarter, EIT is expected to generate around $5.1 million in revenue. That cash will help offset what is another projected year-end deficit of nearly $7 million.

While Lynch said it is too early to tell, history shows there may be payroll issues once again.

"The summertime is lean and in the fall we're scrambling to get through to the end of the year," said Lynch.

At the core, Harrisburg has two main problems: debt and structural deficit.

On chipping away at the more than $340 million in debt, Lynch has made steady progress with Harrisburg's key assets. Lynch said negotiations continue to finalize deals with the parking authority and that infamous incinerator. Lynch said both deals could be done by summer.

But the General Obligation Bond payments still linger over Lynch's head. Harrisburg has missed three consecutive payments the past year-and-a-half. He said he's optimistic the September payment will be made.

Lynch said he's cutting $43,000 from the city's fleet, just one cost-cutting measure. He is also looking for more ways to generate revenue. While an Act 47 provision prohibits Harrisburg even thinking about implementing a commuter tax, Lynch would be open to the idea of exploring that avenue.

What is in play is that "B" word: bankruptcy.

This week, comparable broke city Stockton, California was approved to go that route. However, in Harrisburg, Lynch is still riding the brakes on bankruptcy.

"I think the most interesting thing is people Google Stockton," he said. "You will quickly come to the conclusion that if we can avoid bankruptcy, Harrisburg will be far better off."

Lynch said Stockton's high crime rate is one reason why he is skeptical bankruptcy is a suitable option.

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