Financially Distressed Municipalities Act
The Financially Distressed Municipalities Act (Act of 1987, P.L. 246, No. 47), also known as Act 47, empowers the Pennsylvania Department of Community and Economic Development to declare certain municipalities as financially distressed. It provides for the restructuring of debt of financially distressed municipalities, limits the ability of financially distressed municipalities to obtain government funding; authorizes municipalities to participate in Federal debt adjustment actions and bankruptcy actions under certain circumstances; and provides for consolidation or merger of contiguous municipalities to relieve financial distress.
Contents
History
Most provisions of Act 47 initially remained suspended until the termination of the Pennsylvania Intergovernmental Cooperation Act (Section 708 of Act 1991, June 5, P.L. 9, No 6).
The cities of Erie and Altoona, among others, have narrowly avoided Act 47 designation. Their mayors seek legislative changes to the binding arbitration rules of Act 111, as well as a reduction in the designation of tax-exempt properties, to improve their financial health.[1]
Benefits of Act 47
Although some municipalities (listed in the chart below) have had the Financially Distressed designation removed, all but one of them (Chester) are cities, in part because none could afford to lose the benefits Act 47 provides.[2] The benefits include revenue from the nonresident wage tax available only to cities with Act 47 status.[2]
Distressed municipalities
The following municipalities were designated as part of the Municipalities Financial Recovery Program as of the date indicated. Any dates of imposition and lifting of sanctions, and the rescinding of the initial designation are also noted.
| Municipality | County | Designated | Sanctioned | Sanction rescinded | Designation rescinded |
|---|---|---|---|---|---|
| Aliquippa | Beaver | December 22, 1987 | |||
| Altoona | Blair | April 1, 2012 | |||
| Ambridge | Beaver | April 10, 1990 | April 16, 1993 | ||
| Braddock | Allegheny | June 15, 1988 | |||
| Chester | Delaware | April 6, 1995 | |||
| Clairton | Allegheny | January 19, 1988 | November 24, 2015 | ||
| Colwyn | Delaware | May 6, 2015 | |||
| Duquesne | Allegheny | June 20, 1991 | |||
| East Pittsburgh | Allegheny | November 13, 1992 | December 27, 1999 | ||
| Farrell | Mercer | November 12, 1987 | |||
| Franklin | Cambria | July 26, 1988 | |||
| Greenville | Mercer | May 8, 2002 | |||
| Harrisburg | Dauphin | October 20, 2010 | |||
| Homestead | Allegheny | March 22, 1993 | March 28, 2007 | ||
| Johnstown | Cambria | August 21, 1992 | |||
| Millbourne | Delaware | January 7, 1993 | March 20, 2014[3] | ||
| Nanticoke | Luzerne | May 26, 2006 | August 24, 2015 | ||
| New Castle | Lawrence | January 5, 2007 | |||
| North Braddock | Allegheny | May 22, 1995 | April 11, 2003 | ||
| Pittsburgh | Allegheny | December 29, 2003 | |||
| Plymouth | Luzerne | July 27, 2004 | |||
| Rankin | Allegheny | January 9, 1989 | |||
| Reading | Berks | October 14, 2009 | |||
| Scranton | Lackawanna | January 10, 1992 | January 1, 1999 | November 22, 2002 | |
| Shenandoah | Schuylkill | May 20, 1988 | April 16, 1993 | ||
| West Hazleton | Luzerne | March 27, 2003 | |||
| Westfall | Pike | April 14, 2009 | |||
| Wilkinsburg | Allegheny | January 19, 1988 | November 10, 1998 |
