Harrisburg, Pennsylvania -Capital of Pennsylvania - Bankrupt?

Bloomberg is reporting (http://www.bloomberg.com/apps/news?pid=20601109&sid=ab6OQc35weDI&pos=14) that Harrisburg, the capital of Pennsylvania, the sixth-most populous U.S. state, has been advised by City Controller Dan Miller that it should consider seeking Chapter 9 bankruptcy protection.

In my post on Greece I pointed out the precarious nature of municipalities in the US and now Harrisburg may be the next victim.

“It’s not good,” Miller said at the start of the hearing before a silent audience of about 20 that included city officials and union members. “Nobody wants to do it, but it’s there for a reason,” he said. “Maybe for the purpose of helping cities that are in the situation we are in now.”

The althernatives may be even worse for a cash-strapped City and for every-day working people already suffering to get by. 

Council members should consider asset sales and tax increases before heading to bankruptcy court, said Fred Reddig, the executive director of the state’s office of Local Government Services. He suggested following steps recommended in a recovery plan prepared by Management Partners Inc. of Cincinnati, a consulting firm hired to study the city’s finances as part of a state municipal support program.