PA Announces End of Mahanoy City’s Distressed Municipality Status Under Act 47

Department of Community and Economic Development (DCED) Acting Secretary Rick Siger announced the approval of Mahanoy City’s exit from distressed municipality status under the Act 47 program.

Acting Secretary Siger signed a formal determination letter finding that termination of the city’s distressed status was appropriate under Section 255.1 of Act 47. The decision was made due to the borough’s ability to effectively utilize the tools offered through the program to significantly improve its financial position and management infrastructure since entering Act 47.

“This is a great day for Mahanoy City,” said Acting Secretary Siger. “I commend the hard work of the local officials, community leaders, and other partners to change the borough’s course and make today a reality. Mahanoy City, its businesses, and residents all have a bright future ahead.”

Mahanoy City was designated as distressed on February 18, 2016, under the Municipalities Financial Recovery Program, known as Act 47 of 1987, as amended on July 26, 1988. A decline in three quarters of population, coupled with an aging citizenry, resulted in increased blight and a lower tax base. The Pennsylvania Economy League (PEL) was subsequently appointed the Act 47 Coordinator for the borough.

Mahanoy City made significant strides to improve its management practices and fiscal situation. They adopted a recovery plan which recommended staffing controls as well as tax increases to hire professional management and aggressively fight blight. The borough Council’s willingness to adhere to these recommendations allowed them to get out from under their $800,000 deficit.

“It is a proud day for the Borough of Mahanoy City,” said Michael Connolly, Chairperson of the Mahanoy City Borough Council. “Without the dedication of past and present council members, employees, DCED and PEL, the borough would not be in the position it is today.  Thank you for all your hard work to get us back to a solid financial position so the borough can continue to thrive.

An additional recommendation made to Mahanoy City through the Act 47 program was to investigate and establish a new form of government called Home Rule. Under Home Rule, the basic authority to act in municipal affairs is transferred from state law, as set forth by the General Assembly, to a local charter, adopted and amended by the voters. Establishing Home Rule in Mahanoy City required a committee of seven citizens to meet over the course of a year and propose a total re-vamp of borough government.

“Home Rule ensures adequate representation of the smaller population, fiscal stability with a re-invigorated tax base, guaranteed professional management, a streamlined government as well as assured funding for the vital program of blight elimination and civic planning,” said Gerald Cross, Senior Research Fellow, Pennsylvania Economy League. “The citizens of the borough voted to accept this new form of local control and have embraced it. The changes were profound enough that by 2023 the borough is no longer a distressed municipality but instead is a future-focused and fiscally stable community defeating the trends of the past.”