Harrisburg Pa. files for bankruptcy

October 12th, 2011 - 10:53 pm ICT by Aishwarya Bhatt  

Harrisburg Pa., Oct 12 (THAINDIAN NEWS) City officials of Harrisburg have finally passed a municipal bankruptcy protection after months of debate. The city has been struggling with its finances and it is projected that the coffers will dry up by the end of the fourth quarter.

The city filed the bankruptcy protection at the U.S. Bankruptcy Court on Wednesday. The filing of the bankruptcy protection comes just weeks ahead of the planned Pennsylvania state Senate vote on taking over the finances of the city. The city currently owes $300 million because of a failed project to build a trash incinerator.

The mayor of the city was against the filing of the bankruptcy protection but the vote was 4-3 in favor of the measure. The spokesperson of Linda Thompson told newsmen that the action of the city officials will further complicate the financial state of the city.

Thompson’s proposal for financial recovery was rejected by the city council members on the 31st of August. The plan proposed that property tax in the city should be increased by 8%.

Supporters of the move say it will freeze the payment of the city’s debt and give the officials more time to come up with ways to save the economy.

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