Financially Distressed Municipalities Act


The Financially Distressed Municipalities Act , also known as Act 47, is a Pennsylvania statute outlining procedures to stabilize municipalities in Pennsylvania undergoing financial distress. The Act empowers the Pennsylvania Department of Community and Economic Development to declare certain municipalities as financially distressed. It provides for the restructuring of debt of financially distressed municipalities, limits the ability of financially distressed municipalities to obtain government funding; authorizes municipalities to participate in federal debt adjustment actions and bankruptcy actions under certain circumstances; and provides for consolidation or merger of contiguous municipalities to relieve financial distress.

History

Most provisions of Act 47 initially remained suspended until the termination of the Pennsylvania Intergovernmental Cooperation Act.
The cities of Erie and Altoona, among others, have narrowly avoided Act 47 designation. Their mayors seek legislative changes to the binding arbitration rules of Act 111, as well as a reduction in the designation of tax-exempt properties, to improve their financial health.

Benefits of Act 47

Although some municipalities have had the Financially Distressed designation removed, most cannot afford to lose the benefits Act 47 provides. The benefits include revenue from the nonresident wage tax available only to cities with Act 47 status.

Distressed municipalities

The following municipalities were designated as part of the Municipalities Financial Recovery Program as of the date indicated. Any dates of imposition and lifting of sanctions, and the rescinding of the initial designation are also noted.
MunicipalityCountyDesignatedSanctionedSanction rescindedDesignation rescinded
AliquippaBeaverDecember 22, 1987
AltoonaBlairApril 1, 2012September 13, 2017
AmbridgeBeaverApril 10, 1990April 16, 1993
BraddockAlleghenyJune 15, 1988
ChesterDelawareApril 6, 1995
ClairtonAlleghenyJanuary 19, 1988November 24, 2015
ColwynDelawareMay 6, 2015
DuquesneAlleghenyJune 20, 1991
East PittsburghAlleghenyNovember 13, 1992December 27, 1999
FarrellMercerNovember 12, 1987
FranklinCambriaJuly 26, 1988
GreenvilleMercerMay 8, 2002
HarrisburgDauphinOctober 20, 2010
HomesteadAlleghenyMarch 22, 1993March 28, 2007
JohnstownCambriaAugust 21, 1992
MillbourneDelawareJanuary 7, 1993March 20, 2014
NanticokeLuzerneMay 26, 2006August 24, 2015
New CastleLawrenceJanuary 5, 2007
North BraddockAlleghenyMay 22, 1995April 11, 2003
PittsburghAlleghenyDecember 29, 2003February 12, 2018
PlymouthLuzerneJuly 27, 2004May 3, 2016
RankinAlleghenyJanuary 9, 1989
ReadingBerksOctober 14, 2009
ScrantonLackawannaJanuary 10, 1992January 1, 1999November 22, 2002
ShamokinNorthumberlandJune 16, 2014
ShenandoahSchuylkillMay 20, 1988April 16, 1993
West HazletonLuzerneMarch 27, 2003October 21, 2014
WestfallPikeApril 14, 2009October 12, 2014
WilkinsburgAlleghenyJanuary 19, 1988November 10, 1998