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Manhattan Institute Senior Fellow Steven Malanga on the $25 million cost to fix the sinkholes plaguing Harrisburg, Pa.
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Pennsylvania are definitely experiencing.
That well sinking feeling.
The problem is there's nothing they can do about it now the city is covered in 41.
-- cause of their ceasing -- all of of the city.
And -- have already having they defaulted on their debt they're unable to afford the repair work to fix this problem.
No financing options available at this point to Harrisburg has been forced to search our life including.
Potentially selling wild west memorabilia to make ends meet believe it or not clean up the closets here.
Here to discuss the state of the municipal bond market Manhattan institute senior Palestinian minus Stephen I'm glad to hear -- -- so.
We have I was reading articles as woman on New Year's Eve here's big noise looks -- window -- -- missing call and there's time.
-- all over the city.
-- -- the city's essentially insolvent.
It wanted to throw itself into bankruptcy awhile ago but the state of Pennsylvania prevented -- and basically.
-- you know what's behind this is actually kind of alluded to without realizing that you talked about half.
They have all -- wild west Monroe memorabilia well basically for twenty years they had a mayor who borrowed heavily he borrowed to -- -- borrowed to build civil war museum right as he wanted to make Harrisburg discuss.
He borrowed to build -- that's a minor league stadium.
When the team threatened to leave he borrowed money to buy the team.
And they borrowed about 350 million dollars for this incinerator plant.
That I was supposed to bring all these revenues never did so they essentially -- for the wrong things and are now broke.
So these are legacy issues yes dealing absolutely -- OK so we have -- singles they don't have the money to fix them so literally the entire town is well sinking.
Financially and literally -- what happens.
Well you know.
It it this date in in the Pennsylvania is actually one of those states that rather than letting it -- goes bankrupt is actually eating -- cities they have distressed cities program but.
The state in the city of Harrisburg have been in conflict.
Because the state has a bailout plan which requires things like raising taxes and cutting.
Spending.
This City Council -- Harrisburg does not wanna go along with us they'd rather put themselves -- bankruptcy which is actually very painful process for cities if you look at a place like the light on what they went broke so there's no there are no good options -- a part of -- -- the conflict.
Between Harrisburg and the state which wants to bail them out.
So they stay wants Harrisburg to reach city taxes basically pay for this stuff and also cut spending and cuts and spending right and I would -- to cut spending anywhere in this country -- right.
Why would why would they rather than go into bankruptcy comes to your point I mean wash -- it's easy to say hey let's forget -- debt.
It could mean it could bring that's yes it's name is they are actually hope.
Even bankruptcy and a bankruptcy judge would give them a better deal in the state will get I think that's highly unlikely because bankruptcy judges in in -- Chapter nine which is municipal like but it's not like a bankruptcy a private bankruptcy where a judge can impose a ruling because that's almost taking.
And options -- from taxpayers when the judge does just act as a refereed.
So I don't really think they get a better deal anyway and I think bankruptcy for cities is pretty painful but they seem to think something different.
They're completely basically effectively shut out of the Muni market of course spot of the defaulted yet right today how to -- -- -- and let me play this out when Arafat well.
See here's the thing Detroit is another city that's insolvent but it's it's state Michigan is back -- yet.
Until Michigan is -- it is is using it's borrowing power to borrow to keep Detroit of.
A -- that -- could happen in Harrisburg but right now because there's this conflict right it's not half of the council gets lost in -- It will basically helped Harris yeah exactly.
-- maligned act like soap opera stuff.
There -- some out.
