PENNSYLVANIA Is Act 47 enough to save state's troubled towns?

Twenty cities in Pennsylvania have been designated as distressed communities.
PITTSBURGH (AP) -- By the mid-1980s, the steel industry was in full-blown crisis and with it many of the communities where steel workers lived. Steel towns were stacking up debt and spiraling toward insolvency as thousands lost their jobs.
In 1987, faced with a total collapse of infrastructure in numerous municipalities, lawmakers responded with Act 47. The triage measure was intended first to stop the bleeding, and second to get financially troubled communities back on the way to recovery through zero-interest loans, professional consultation and a tool chest of other rapid-response initiatives.
Nearly two decades after its adoption, Act 47 has succeeded in stabilizing communities. But in most cases, it has not achieved its ultimate goal -- kicking those towns out from under state oversight.
There have been 20 municipalities placed under state oversight since 1987. Of the 15 towns placed on the list between 1987 and 1993 (a stretch in which at least one town was declared distressed every year except 1990), 11 are still there, including Farrell in Mercer County.
Rising debt
Annual debt loads for these communities, one barometer used to gauge financial health, rose from a combined $18.5 million in 1990, to $38 million in 2000, an increase of 105 percent, according to an Associated Press review.
"Does the act accomplish generally what it was intended to do, which was to get a distressed community back on its own two feet in a couple of years? That vision has not panned out," said David Miller, who has helped set up state oversight in several Act 47 municipalities.
"We need to start talking about the obsoleteness of some communities. There are a number of these communities where it is questionable whether they can, or even if they should, survive."
The economy that led to the creation of dozens of thriving communities in Pennsylvania simply does not exist anymore, said Miller, now the associate dean of the Graduate School of Public and International Affairs at the University of Pittsburgh.
The program costs relatively little to administer -- $2.8 million annually, according to Fred Reddig, deputy director of the Governor's Center for Local Government Services. Reddig oversees Act 47.
It has been very successful in two of its three main goals: stabilizing finances and ridding towns of faulty and sometimes fraudulent management practices. All of the elements are in place for financial recovery -- save for new revenues that made Act 47 towns the vibrant communities they once were.
"We have been effective in those first two steps and a number of studies have validated this," Reddig said. "The third part of that equation has been the tough part."
Alternative solution
A nagging question for the state is just how long should Act 47 towns be kept on life support and if the decision is made to pull the plug, what then?
Communities, for obvious reasons, cannot be liquidated like a business.
The collapse of one community could have a severe impact on surrounding communities, ranging from paralyzing social ills to the decay of physical infrastructure, not to mention blight.
A number of planners -- from Miller, to former Allegheny County Chief Executive Jim Roddey -- have advocated redrawing community boundaries to do away with public services that are duplicated over and over again in towns with diminishing revenues and a shrinking population.
In Allegheny County, one of the most politically and economically fractured regions in the country, Miller has proposed the merger of 39 towns that would become the third-largest city in Pennsylvania. In the region southwest of Pittsburgh envisioned as the so-called "River City," there are 361 elected officers and 35 police departments in an area that now has fewer residents than Pittsburgh, Miller said.
"Some of these communities have lost half their population and the industry that dominated the community is no longer there," he said. "It is no longer a management problem, but a real fundamental change in the state and national economy. Act 47 is not going to save them."
Being fair
Redrawing boundaries, however, is somewhat akin to asking a homeowner who has faithfully paid taxes for years and maintained an immaculate lawn to take ownership of an adjacent property with leaky plumbing, a crumbling foundation and mounds of back taxes.
"Boundary change is a process that requires a majority vote from every municipality involved," Reddig said.
Even on a smaller scale, such mergers have proved a difficult sell, though it has been recommended by hired consultants.
The Center for Local Government Services has overseen the establishment of a commission that, for the past several years, has tried to meld the tiny borough of Franklin into five surrounding communities after the demise of a steel mill there. The Cambria County town was declared distressed 16 years ago this month.
"They initially agreed to work out a process for boundary change, but there has been some retrenchment," Reddig said.
Reality check
Yet putting distressed communities on a clock is unreasonable, Reddig said, given the complex swirl of macro- and microeconomic currents affecting the entirety of the commonwealth.
He points to Homestead, a town just outside Pittsburgh that was placed under state protection 11 years ago, as an example of why.
On Saturday nights, it is often impossible to get a seat in the multiscreen theater complex, the restaurants built recently are jammed and the cash registers at stores such as Abercrombie & amp; Fitch, Old Navy and Victoria's Secret are ringing big sales. Since the 265-acre retail and entertainment complex was built on the site of a former steel mill, income taxes have soared by 66 percent and property taxes have more than doubled in recent years.
Last year, the borough saw its first considerable housing construction in at least three decades, Reddig said.
But the traditional downtown strip is still depressed, and no one expects the borough to exit Act 47 anytime soon.
"Homestead is not back to where it was, but there is improvement taking place," Reddig said. "There is a ripple effect when it works."
Act 47 has done its part, and an economic stimulus package that is now in place statewide will address issues that the act was never intended to address, he said.
The distressed-city program remains a viable option for some towns, but some planners say the state lacks legislation that would give it a stronger hand in erasing boundaries when it's time to let go.
"Act 47 was never designed to eliminate communities ... it was always put in place on the presumption that any community can be saved," Miller said. "I think experience has shown us otherwise."