Stated Power Procured
In many ways, the State’s attorneys give Harrisburg City Council too much credit.
On July 25th, the Receiver of the City of Harrisburg and Harrisburg City Council are scheduled to meet in Commonwealth Court to argue the question—who has the power to impose taxation? For various reasons—some valid, some pathetic—Harrisburg City Council does not yet have an attorney to represent its position that the State’s appointed arm, so called the Receiver, cannot make City Council raise taxes on its citizens. With no attorney, City Council has asked the Court for a continuance of the July 25th hearing on the Receiver’s Petition of Writ of Mandamus, that is, Receiver William Lynch’s request to force the City of Harrisburg to raise the Earned Income Tax (EIT) on City residents. In response to Council’s request, the State has said to the Court—don’t do it. Don’t give City Council more time. The State asserts this hearing should happen as scheduled.
The State’s letter of response to City Council’s request is four pages long, written by one of the Receiver’s attorneys from the deft law firm of McKenna, Long, and Aldridge. It implies that City Council’s request to postpone the hearing is opportunistic and refers to the request as merely the “latest tactic” by Council to delay the City’s recovery.
Here’s the thing—and maybe it’s the faux pas of our democracy—elected officials are nothing more than people elected to office to represent other people. In too many cases, this becomes an issue of popularity, of influence, or of money. In the City of Harrisburg, rarely does it seem to be an issue of skill, of expertise, or of capability. If City Council has any fault here, it’s that the Councilors are inept to the serious tasks at hand.
And let’s be honest, what’s been going on in the City of Harrisburg is over most people’s heads. SWAPs, bond indentures, negative arbitrage. Unless you’re schooled in these matters, they’re head scratchers. Not to mention the fact that the amendment to Act 47, i.e. Senate Bill 1151, is pretty much brand spanking new. Deny, deny, deny, but the law was hastily written with the City of Harrisburg as muse. Not even its own writers know it well, blinded they were by the need for advantage and power. It was written quickly, tweaked to accommodate special interest (not necessarily PA 3rd class cities’ despite the claim), passed with little more than a nod to political seniority, and has yet to be tested.
Now it’s being tested.
The integral question here is does the Receiver have the right to order City Council to raise taxes on citizens? It’s a fundamental question and one consistently asked by Harrisburg City Councilors. The statue declares the Receiver cannot raise taxes. However, the statute also declares the Receiver “may issue an order to an elected or appointed official of the distressed city or an authority to: (1) implement any provision of the recovery plan.” Receiver Lynch did just that.
On June 11, 2012, Lynch officially ordered the City Council to raise the EIT on Harrisburg’s residents. The increased EIT was a component of David Unkovic’s Court-approved Recovery Plan, and if you stood the man in front of you now, Unkovic would say, it is a necessary part of his Plan. No doubt he would also say that it is a part of his Plan because it was a limited tool available to him in developing fiscal stability for the City of Harrisburg. He would also say, State laws need to change to help the City of Harrisburg.
In other PA Act 47 3rd class cities like Johnstown and Reading, those cities have what’s called a “commuter tax” to help offset their financial woes. City of Harrisburg? No. It’s never been permitted. During its Act 47 planning process (pre-Receivership), the City of Harrisburg was told time and time again, don’t even think about a “commuter tax” because it will be kiboshed. Legislators stood on pedestals and sounded that message loud and clear, which just gave vigor to the chorus of 50,000 commuters who come into the City everyday chanting, “No way! We’re not paying that for that City!”
As if that wasn’t enough, Cumberland County’s State representative, Glen Grell…..wait let’s pause here for a moment. Let’s discuss the significance of Cumberland County (for those readers who don’t live around here and who don’t get the “West Shore” versus “East Shore” thing). As if the City of Harrisburg doesn’t have its challenges with its own county, Dauphin County, the county pretty much a stone’s throw across the mighty and majestic Susquehanna River is called Cumberland County. If there was ever a greater line in the sand, it’s the river that runs between the two shores. The West Shore, commonly called the White Shore (in full disclosure, this white writer was born and raised there), appreciates its view from afar and has a lot to say about the City of “them” over there. Ironically, many of “those” people across the river traverse the bridges daily to work in the plethora of State and Federal places to work in the City of Harrisburg. On the weekends, they come en masse to eat, drink, and fête. And fête in our streets quite rambunctiously, they do. All City police hands on deck Friday and Saturday nights come closing time.
Back to Glen Grell who represents the other shore, not the City of Harrisburg. Not only was Representative Glen Grell quite vociferous in the media about the fact that he would do anything and everything to make sure his constituents would not be faced with a “commuter tax,” but also at an October 11, 2011 Town Hall meeting in Hampden Township (one of the primo townships of Cumberland County) Grell bragged about his authorship of the “takeover the City” law. He announced, “My amendment should be of great interest to anyone who lives in the region. Those concerned about the possibility the city’s [of Harrisburg] financial woes would result in a commuter tax will be pleased to learn this legislation prohibits such an action.” His amendment to the State’s Financially Distressed Municipal Act 47 was passed by the State Legislature six days later. With that, the State take-over of the City of Harrisburg began.
The people of the City of Harrisburg have heard left right left that there was no way the huge financial burden would be anything but theirs to bear.
City Councilors may not get the nuances and intricacies of everything, but they do get the fact that they are the only thing between the parties pushing and the citizens of Harrisburg. At least the majority of them do.
Which takes us to another point of the State’s letter to Commonwealth Court pronouncing, “Don’t do it. Don’t give them more time.” In the letter, the Receiver’s attorney refers to the July 10th Harrisburg City Council legislative session when a Resolution was presented to hire attorney Mark Schwartz to represent the Council body against the Receiver’s Petition for Writ of Mandamus. Five of seven Councilors were present. The vote of 3-2 failed because three doesn’t designate a majority of seven.
That’s how that vote failed, not because of a “refusal to retain counsel,” but rather because someone in the community died (it was said) and that’s why two Councilors were absent that night for the vote. Of course, if City Council were swift and adept, another meeting would have been called and a re-vote cast.
That’s not what happened, though, and the State’s letter remarks on that very neglect. However, where the letter does goes awry is that it declares, ”City Council apparently sat on its hands as the days passed.” How does the State know that? In truth, that’s not what happened at all. Individually and personally, City Councilors tried to find counsel. They’ve been trying to find counsel since Mark Schwartz’s July 12th letter informing City Council he will no longer represent them because he has yet to been paid. The State’s letter fails to mention that fact. For a variety of reasons, City Council has been unable to retain other counsel. The State remarks, “City Council is capable of obtaining able counsel immediately.” As if that claim is not laughable enough, after making fun of City Council for sending the request for continuance to the Court and opposing counsel BY US MAIL (all caps, written as it is in the State’s letter), the Receiver’s attorney then points out that it’s the 20th of July, two days before the stated July 23rd due date of responding to the Receiver’s Petition of Writ of Mandamus before the July 25th hearing; thus, the State insists City Council has plenty of time to hire counsel. Over the weekend. Well, actually, the Receiver’s attorney’s letter doesn’t point that out. That those two days referenced are a weekend.
In some ways, the majority of City Council utterly gets it and always has. Look over their actions over the past year. For part-time elected officials with no governmental expertise or training, they were keen enough to feel out what is fundamentally fair and what is fundamentally not fair. The majority has stood strong against the original Act 47 Recovery Plans presented by Novak Consulting Group and then the Mayor. The majority has stood strong against State takeover. The majority has stood strong against the Receiver’s Recovery Plan.
While we may not have always agreed with City Council’s approach, while we may have questioned Councilors’ ways of doing things, one thing no one can take away from them is that the majority has been consistent in their opposition to City residents getting stuck with the full bill of Harrisburg’s debt.
In the State’s letter, the Receiver’s attorney outlines a timeline of “foot-dragging” and non-response. Clearly, that attorney has not sat in City Council Chambers over the past year and a half and witnessed the long-winded pontifications of Councilors proclaiming their resolve to solve the fiscal troubles of Harrisburg not fully on the backs of taxpayers. Sure, there’s been a lack of a plan on the table from them. But do they have the skill-set to develop a comprehensive plan to save Harrisburg? Do they have the resources? The financial, legal, and business support? No. Contrary to the Receiver’s high-powered attorney’s letter, City Council really doesn’t have the option to just run out and get the best and brightest to help them sort through this mess in a sophisticated manner.
Despite City Councilors’ frustrating amateurishness, there have been several instances where the City Council of Harrisburg has been validated. Former Receiver David Unkovic agreed with them that the previous Act 47 Plans could never work as written. He agreed with them that extreme creditor concessions were mandatory. He agreed with them that State laws needed to be changed. In the end, he agreed with them that corruption and crimes exist in the saga that is Harrisburg’s financial crisis.
That, though, is not the narrative of the State, and the State’s letter to the Commonwealth Court indicates that. The State’s narrative dismisses City Council for “doing nothing.” It accuses City Council of being manipulative and disingenuous. It says City Council doesn’t care about the people of Harrisburg like the State does.
Unfortunately, it’s not always about the truth. Rather it’s about whose story reigns supreme. The State has the money and resources it needs to write the story it wants, to have that story propagated and exposed. Harrisburg City Council does not.
The faux pas of our democracy.
UPDATE: Commonwealth Court Judge Leadbetter granted the continuance. The hearing has been postponed until Tuesday, August 14th. It seems a bit of luck was involved. See: Stated Power Procured
Drawings by Ammon Perry: Doodletillomega: Illustrations and Drawings by Ammon Perry