Harrisburg, Pennsylvania, which has missed $6 million in debt payments since Jan. 1, should consider seeking Chapter 9 bankruptcy protection, City Controller Dan Miller told a three-hour special committee hearing.
John Moorlach, who became treasurer of Orange County, California, after it filed the biggest municipal bankruptcy in U.S. history in 1994, has some advice for the new record-holder, Jefferson County, Alabama.
Stephen Reed, Harrisburg’s mayor for 28 years, pushed Pennsylvania’s capital into insolvency as the more than $500 million in bond deals he oversaw to finance community development drained city coffers.
Linda Thompson, the Harrisburg mayor who asked Pennsylvania to designate the state’s capital city as fiscally distressed in 2010, lost her re-election bid in the Democratic Party primary to a local bookstore owner.
Harrisburg’s notice of a second general-obligation debt default contrasts the way distressed cities are dealt with in Pennsylvania compared with Rhode Island, according to Matt Fabian of Municipal Market Advisors.