As of 2014, 19 states have passed fiscal emergency laws to address financial distress within their municipalities. Among those 19 statutes, Pennsylvania's Municipalities Financial Recovery Act ("Act 47") represents one of the most aggressive attempts to cure municipal distress. Act 47 works by empowering the recovery coordinator, a newly-created office, to design and implement a fiscal recovery plan for participating municipalities that includes both cost cutting and new revenue measures. Since its passage, 28 municipalities have opted to participate in the Act 47 program. Despite Act 47's promise to cure municipal distress, these participating municipalities have found Act 47 status to be both longlasting and legally controversial.
Legal controversy has specifically involved Section 252 of Act 47, which limits the enforcement of certain "arbitration settlements." After a series of court decisions, the Pennsylvania Supreme Court in 2011 's City of Scranton decision upended precedent and effectively nullified a key provision of the Act. Owing to outcry concerning Act 47's ineffectiveness, the Pennsylvania Legislature has also repeatedly modified Act 47. Most recently, in 2014, Act 47 was modestly reformed to include, among other provisions, a participation time limit and new revenue measures. Despite both judicial and legislative intervention, the Act 47 program still lacks the tools necessary to successfully aid financially struggling municipalities. This Comment will argue that both judicial and legislative interventions have failed because they have not addressed the roots of municipal distress. Therefore, this Comment will argue for further legislative reform aimed at remedying several identified causes of distress. Specifically, this Comment will advocate that reform should include tax reform for non-profit entities, municipal pension reform, and regionalization of municipal services.
Richard L. Armezzani,
Trapped in Distress: How the Act 47 Program is Failing Pennsylvania's Municipalities,
Dick. L. Rev.
Available at: https://ideas.dickinsonlaw.psu.edu/dlra/vol120/iss2/6