Harrisburg, PA. To Consider Bankruptcy

The city of Harrisburg is in trouble. According to this report they have missed $6 million in debt payments since Jan. 1. The city controller told a special committee that they should consider filing Chapter 9.

I blogged about things like this happening a few days ago, except with states instead of cities. What will happen to the credit of Harrisburg? Oh, it was already lowered to the B2 level,  by Moody's, which is five levels below investment grade. How many people are going to want to invest in this city? Not many if I had to guess.

"Susan Brown-Wilson, the head of the council’s Budget and Finance Committee, said she supports a bankruptcy filing because the state oversight process is too time-consuming, and would require a tax increase that Harrisburg can’t afford. Bankruptcy might be the best option,” she said. “This city is so indebted there’s really no way out."

Well, here is the options:
1. declare bankruptcy or
2. raise taxes to the people that can't afford things now.

Either way, there will likely be a decrease in city services to help lower city costs. That will mean less firefighters, less cops, less garbage collections, closures of parks, less lights on for baseball games for the city league, closures of city offices to save money on utilities, less people wanting to relocate, less new businesses, increased taxes on EVERYTHING, increased water and sewer bills, more crime, higher response times of emergency services and government officials still keeping their inflated salaries.

I predict Harrisburg won't be the only city or state that will face this predictiment. Mark my words, we are not "climbing out of the recession" as the toutTV is reporting. Hold on, it will get rougher.