Act 47

Emily Previti / WITF

After nine years of state intervention, Nanticoke’s got a balanced budget, most debts paid off and a full complement of financial management staff in place.

But it all happened at the expense of taxpayers and required changing the city’s form of government. 

Gridlock And Grudges: Toxic Relationships In Pennsylvania Cities

Jun 11, 2015
Lindsay Lazarski / WHYY

The Commonwealth’s Act 47 program to help cash-strapped local governments doesn’t address how elected officials might get along better, despite how critical relationships are to their financial well-being.

Local officials who have trouble getting along have some options for mending their relationships.

Flickr user Joseph A

There are currently 19 cities and boroughs in Pennsylvania designated as “distressed” municipalities under Act 47, including Pittsburgh, Braddock, Rankin, Duquesne and Clairton in Allegheny County.

A State House bill meant to help those municipalities identify ways to make their operations more efficient may end up not doing that at all.

State lawmakers are working out the details of a plan to overhaul Act 47, shorthand for the much-maligned program that to rehabilitate municipalities with money problems.

Cities lingering in the state program would be given deadlines to exit. The state would expand early intervention efforts for municipalities sailing toward fiscal cliffs. Smaller communities would have new ways to disband if residents agree they’re just not viable.

How Pittsburgh Plans to Get Out of Act 47 in 5 Years

Jun 25, 2014
Ryan Loew / 90.5 WESA

On Tuesday, with a 7-2 vote, the Pittsburgh City Council approved Mayor Bill Peduto's Act 47 recovery plan. The five-year plan includes recommendations for a possible property tax increase and bond issues to improve deteriorating infrastructure.

Kevin Acklin, the mayor's Chief of Staff and Chief Development Officer explained how the City plan is different from past plans.

The city of Pittsburgh is one step closer to approving its third Act 47 Recovery Plan, after City Council on Wednesday presented and gave preliminary approval to 17 amendments.

“They don’t impact anything financial,” said council president Bruce Kraus. “They really are more philosophical in nature, more or less, about how we want to plan the next five years.”

What Pittsburghers Need To Know About Act 47

Jun 17, 2014
Illustration courtesy of Pittsburgh City Paper

What is Act 47?

Act 47 is a state oversight program for “financially distressed” cities in Pennsylvania. The state tries to help cities turn around their finances and operations. The name comes from the Municipalities Financial Recovery Act (Act 47 of 1987).

What’s the history of Act 47?

Pittsburgh has been “financially distressed” for 10 years. The plan that the mayor and city council are currently considering will guide the city from 2014 through 2018.
Who prepares the five-year plan on the state's behalf?

Pittsburgh City Council members heard from the public Monday about the third amended recovery plan for the city.

Pittsburgh has been under financial oversight for a decade. The amended plan, aimed at getting the city out of Act 47 status and closer to financial solvency, sets novel goals: to reduce the city’s deficit and debt burden, maintain the fund balance at an appropriate level, increase pension contributions and spend more on capital construction.

Mayor Bill Peduto on Act 47 & Selecting a New Police Chief

Jun 11, 2014
Ryan Loew / 90.5 WESA

In the past decade, Pittsburgh has accomplished much: East Liberty was revitalized, the river fronts were beautified, and it's received many accolades from the press, including the United States’ most liveable city. Through all of this, however, the city was in a precarious financial position.

For 10 years Pittsburgh has been under Act 47 oversight for distressed municipalities. For all its improvements, the city has yet to implement a comprehensive financial management system to address legacy costs of debt, pensions, post retirement benefits, workers compensation along with a financially viable long-term capital plan.

Mayor Bill Peduto asked Gov. Tom Corbett in January to keep Pittsburgh under Act 47 state oversight for financially distressed municipalities, saying that while city finances have improved, more economic reforms are needed.

Last week the Intergovernmental Cooperation Authority, one of two oversight boards for Pittsburgh, called for the city to reduce services by 20 percent. Peduto responded to this while explaining how difficult it has been to get the city’s finances in order.

Another PA City to be Declared "Distressed"

Jun 6, 2014

While City Council and Mayor Bill Peduto try to finalize a third, 5-year recovery plan for Pittsburgh under Act 47, the city of Shamokin in Northumberland County will soon become the 21st municipality in the commonwealth currently declared financially distressed.

"This is a financial mess," says Shamokin City Clerk Robert Slaby.

Days after the Act 47 Recovery Coordinators submitted their 166-page plan to the city for review, the Intergovernmental Cooperation Authority, or ICA, put in their two cents.

Pittsburgh’s Recovery Coordinators have submitted a new plan – the third since the city has been under distressed Act 47 oversight – to get the city into solvent financial shape.

In addition to eliminating operating deficits and reducing the city’s debt payments, the latest plan to get Pittsburgh out of commonwealth oversight focuses on beefing up the employee pension fund.

Liz Reid / 90.5 WESA

“It’s not going to be easy.”

That was Pittsburgh Mayor Bill Peduto’s primary message to City Council and the public Tuesday morning, as he shared details of the Steel City’s dire financial situation and challenged his colleagues in city government to help find solutions.

The address coincides with Tuesday night’s public hearing on the city’s financially distressed status, an event organized by Act 47 coordinators.

Sen Teplitz: Get Out and Stay Out of Act 47

Apr 14, 2014

Act 47 was introduced by the Pennsylvania state legislature in 1987 as a means of helping financially distressed cities recover and avoid bankruptcy. 27 years later, several municipalities that were placed under Act 47 oversight have never rebounded.

State Senator Rob Teplitz (D – Dauphin) hopes stronger legislation would help these municipalities have their distressed status removed, while at the same time preventing other municipalities from entering Act 47.

Mark Nootbaar / 90.5 WESA

With the thanks of Pittsburgh’s mayor, Gov. Tom Corbett Thursday announced that the city would remain under the controls of Act 47. 

Pittsburgh entered into distressed-city status 10 years ago, and the Ravenstahl administration had argued in 2012 that enough progress had been made to release the city from its bonds.

“While Pittsburgh continues to take considerable steps in its efforts in stabilizing the city’s financial position, many conditions that originally led to the distressed determination have not been alleviated,” Corbett said.

The state board that oversees the city of Pittsburgh’s finances has given its approval to changes made to the proposed city budget by Mayor Bill Peduto.

The Peduto administration had until the end of March to present final changes to the budget but has done so early.

A week after Pittsburgh Mayor Bill Peduto sent a letter to Gov. Tom Corbett asking that the city stay under Act 47 state oversight, the city’s firefighter’s union is asking the opposite.

“The Act 47 team wrote a letter to the governor saying, ‘We’ve exceeded all of our financial expectations by the plan.’ And as such they recommended that we go out of 47,” said union president Joe King.

Why Mayor Peduto Wants Act 47 to Stay, for Now

Jan 10, 2014
Mark Nootbaar / 90.5 WESA

In 2003, the city of Pittsburgh was operating under a debt burden of more than 20% of its operating budget. Pools and recreation centers had to close and hundreds of city employees, including police officers were laid off.

Pittsburgh was declared financially distressed and placed under Act 47 oversight.

As the local economy has stabilized, former Mayor Luke Ravenstahl, along with Act 47 coordinators have said the city is ready to be released. But Pittsburgh's new Mayor Bill Peduto is asking Governor Corbett to keep the city under Act 47 oversight to allow his administration to work on a final recovery plan.

Updated 3:53pm 1/8/2014

The City of Pittsburgh has been under Act 47 state oversight since 2003. Back then, Pittsburgh was operating with a debt burden of more than 20% of its operating budget, pools and recreation centers had to close and hundreds of city employees, including police officers, were laid off. In late 2007, former Mayor Luke Ravenstahl along with Act 47 coordinators said the city was ready to be released. Even at that time, then Councilman Bill Peduto said the city wasn’t ready.

A task force charged with revising the state's more than 25-year-old program for fiscally distressed municipalities is getting ready to recommend legislation.

The Act 47 program, established in 1987, was meant to take in cities that were on the brink of financial ruin. It has just shown to be not so adept at ushering stabilized cities out.

Rep. Chris Ross (R-Chester) is co-chair of the panel suggesting changes. He said the group will likely recommend creating a deadline for Act 47 municipalities to leave the program.

A new report points out to policy makers what some municipalities already know: Pennsylvania’s program for helping distressed cities has an unimpressive track record.

Called simply Act 47, the program has claimed 27 cities and towns, and only six have exited the program.

Kil Huh, an author of the Pew Charitable Trusts report, said when the state does step in, a plan for stepping back out should be outlined.