Lessons to be learned and applied. The days of free lancing are over, and if the public can't see this or understand you can't spend more than you make, then suffer the consequences. The consequences are, of course, no tax dollars from all the rest of us on a budget.
Question - where were the taxpayers all this time? Why didn't anyone stand up and say what are you doing to this mayor? Was everyone sound asleep?
When the child is told not to touch the hot stove but does anyway and gets burned, the child has to live with the pain. It is very likely the child will not touch the hot stove again.
The Man That Bankrupted Harrisburg
Source: Steven Malanga, "The Man That Bankrupted Harrisburg," City Journal, December 2010.
Harrisburg, Pennsylvania, has teetered on the edge of fiscal ruin for over a year. Its debt crisis stems from a long borrowing spree by its recently retired mayor, Stephen Reed, who governed the city for 28 years, says Steven Malanga, the senior editor of City Journal and a senior fellow at the Manhattan Institute.
Reed borrowed liberally to invest in projects that the private sector wouldn't finance on its own: building parking garages downtown; constructing and later renovating a baseball stadium; and then buying the minor-league baseball team, the Harrisburg Senators.
Over the last decade, Reed began to spend borrowed cash in ever-riskier ways, says Malanga.
In 2003, the local newspaper, the Patriot-News, discovered that he had used public debt to buy nearly $5 million in American historical artifacts, including a $125,000 pistol once owned by Doc Holliday, in anticipation of opening a Wild West museum in Harrisburg. Neither the museum nor the purchases had city council approval. Then Reed put together the incinerator project, seeking to upgrade a local plant with speculative new technology.
Design flaws and delays plagued the project, burdening the city with nearly $288 million in debt and $70 million in bond payments this year alone.
In September, Pennsylvania governor Ed Rendell announced that the state would help the city meet its general-obligation bond payments, fearing that a default would make it impossible for other state municipalities to borrow. But Harrisburg remains deeply indebted.
The city's predicament ought to be a warning to other cities that use borrowing to finance projects of questionable economic value, says Malanga.
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