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Harrisburg Spurns State Recovery Plan, Putting Debt at Risk

Harrisburg’s City Council rejected a fiscal recovery plan, risking the loss of state aid and the Pennsylvania capital’s ability to pay bondholders and workers.

The council yesterday voted 4-3 against the blueprint proposed by state consultants that would have required the sale of municipal assets and a wage freeze to pay debt five times its general-fund budget. Now, Mayor Linda Thompson has 14 days to develop an alternative way to pay the obligations and close the city’s $5 million deficit.