What goes into an Act 47 recovery plan?
One in a series explaining key terms and concepts of Pennsylvania government.
The plan usually offers financial projections and recommendations to restore and maintain financial stability.
It defines "recovery" specific to the municipality; in other words, the standards that, when met, allow it to petition to Pennsylvania Department of Community and Economic Development to exit Act 47.
Here are some typical recovery plan steps:
- Sales of non-essential municipal assets
- Debt restructuring
- New or higher fines and fees to generate revenue
- Savings through layoffs, departmental reorganizations or technology solutions
DCED has to OK the plan. So does the municipality's governing body and top official.
If local leaders don't like the state's plan, they can propose their own, but the state has to approve it.
If a stalemate exists, the state might withhold grants and other aid, so long as that doesn't risk a fiscal emergency4 and pension default.
4. Fiscal emergency: insolvency or an inability to provide vital services exists or appears likely within six months. Governor must declare.
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