The Tribune Democrat, Johnstown, PA

Editorials

June 17, 2014

Revamping Act 47 | State would tighten rules on recovery act

JOHNSTOWN — It soon could be sink or swim for Johnstown.

A bill that is floating through the state Senate would revamp the way Act 47 is administered. The financial recovery program helps struggling municipalities obtain grants and loans while allowing them to increase the earned income tax on residents and commuters, thus earning it the “commuter tax” nickname.

Johnstown has been relying on Act 47 programs since Aug. 21, 1992.

Neighboring Franklin Borough also entered Act 47 protection, preceding Johnstown by about four years.

The bill sailed through the House by a 156-42 margin.

The new legislation would limit the time a municipality could lean on Act 47 for help. Currently, it is open-ended. The new measure would place a five-year deadline on Act 47 help.

“They will be forced to work their way out of Act 47 or declare bankruptcy,” state Sen. John Eichelberger, R-Blair, said. “They should be rehabilitated and brought out of distressed status as soon as possible.”

We agree. The longer a municipality languishes in distressed status, the harder it seems it is to regain its financial footing.

One of the stipulations of the new bill would be early intervention to help keep municipalities out of Act 47.

The measure, while providing some financial help, also proves to be a hindrance. Businesses looking to expand or relocate are hesitant to move into an Act 47 city or borough because it carries a stigma

of being a failure.

Johnstown City Councilman Pete Vizza opposes the proposed five-year time limit.

“I would think it’s best that it would remain open-ended because every situation is different,” Vizza said. “I would think that the city of Johnstown is showing that we’re working hard.”

If that is the case, why has Johnstown remained in distressed status for more than two decades? In 20 years, you would think that council’s hard work could have come up with an exit plan already.

Call us skeptics, but our glasses are not as rose-colored as Vizza’s. We tend to agree with Councilwoman Marie Mock, who said: “It’s always a Band-Aid. You grow accustomed to having it.”

Millbourne Borough is one of three boroughs to have exited Act 47. No cities in the Keystone State have accomplished the feat.

We believe that Johns-town’s officials should be picking the brains of Millbourne’s leaders. They should look at Millbourne’s every budget, contract, expenditure, etc., to find a way to cast aside the Act 47 crutch.

City leaders are now faced with finding another city manager. It is imperative that they hire someone who knows the nuances of Act 47. It would be a feather in council’s cap if they could hire someone who has guided a municipality out of financial ruin and back to prosperity.

It’s time that Johnstown begins to climb out of its shadows. It’s time for Johnstown to begin swimming.

 

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