HARRISBURG, Pa. (AP) — The law that unleashed the unprecedented state takeover of Pennsylvania’s financially troubled capital received a fresh legal challenge on Tuesday, this time from several elected city officials.
The lawsuit was filed by five of Harrisburg City Council’s seven members, Controller Dan Miller and Treasurer John Campbell, and asks a federal judge to put a stop to the state’s takeover. In May, U.S. District Judge John E. Jones III threw out a previous legal challenge, ruling that the three Harrisburg residents who filed it — a former mayoral candidate, a firefighters union president and a religious leader — lacked the standing to sue.
Only the city has standing to challenge the law, he had said.
In the new lawsuit, the officials say the 8-month-old law that unleashed the takeover is unconstitutional because it violates equal protection guarantees that Harrisburg should be treated like Pennsylvania’s other financially troubled municipalities.
They also say the Legislature improperly delegated its lawmaking ability to the governor, in violation of the state constitution.
Gov. Tom Corbett has maintained that he believes the law will withstand court scrutiny. Harrisburg Mayor Linda Thompson, an ally of Corbett’s, did not join the lawsuit and said Tuesday through a spokesman that the city administration remains focused on carrying out a court-ordered fiscal plan written by state appointees.
On Monday, Corbett’s court-approved appointee who now oversees Harrisburg, William Lynch, told the state Commonwealth Court that the city could run out of cash by October, just nine months into its fiscal year.
State lawmakers have considered extending a ban on a federal bankruptcy filing by the city past the current June 30 expiration date. But Lynch opposes an extension because the power to seek bankruptcy protection would give him a stronger hand in seeking concessions from the city’s creditors, said Lynch’s spokesman, Cory Angell.
“The best way to avoid bankruptcy is to have the ability to go into bankruptcy,” Angell said.
Thompson’s opposition to a bankruptcy filing derailed a petition filed last fall by City Council members. Lynch, as the city’s so-called receiver, has the authority to do so under the state’s municipal takeover law.
The Oct. 20 takeover law was part of a broader effort by Corbett and the Republican-controlled Legislature to force the city to pay down a massive debt tied to the ill-conceived renovation of its trash incinerator without slapping a tax on commuters or using bankruptcy to extract concessions from creditors, such as Dauphin County and bond insurer Assured Guaranty Municipal Corp.
Under the law, the receiver has broad authority over the city’s day-to-day financial dealings, as well as the power to sell city assets and negotiate contracts. While the law says a recovery plan or receiver may not unilaterally levy taxes, Lynch asked the City Council last week to immediately enact aspects of the state’s financial plan it has balked at, including increasing the city’s earned income tax.
Otherwise, Lynch said in a letter, he will seek a court order.
“Our position is that it’s part of the (court-approved recovery) plan and because it’s part of the plan, he can go to Commonwealth Court and say, ‘This needs to be done,'” Angell said.
