Pennsylvania Capital to Skip on Debt Payments

March 11, 2012 Updated: March 11, 2012

Harrisburg, the debt-ridden capital of Pennsylvania, will skip on two municipal payments that are slated for next week, The Patriot-News reported.

The decision to skip on the payments was done to maintain cash flow to keep vital services around.

“The failure to make these payments does not diminish my resolve to move forward with the initiatives under the recovery plan,” the city’s receiver, David Unkovic, told the newspaper.

He noted that bankruptcy remains an option for the city but said Harrisburg is on a fiscal recovery plan.

Pennsylvania’s capital is $326 million in debt over its trash incinerator, which needed costly repairs and upgrades, Reuters reported. In Unkovic’s plan, the city may sell parking garages, the incinerator itself, and other assets.

“Even though this bond payment is not going to be made, it doesn’t mean that we can’t proceed as planned,” Unkovic added.

Harrisburg Mayor Linda Thompson supported Unkovic’s decision, saying that he “is charting the best fiscal recovery course given the current situation.”