Sunday, March 21, 2010

Not all earned media is worth the same

Don't say you didn't hear about this here weeks ago... but the Economist is poking at the bankruptcy talk coming out of Harrisburg.  See similar recent coverage in the Fiscal Times and this from The Deal yesterday as well.  The possibility of a state capital even talking about bankruptcy is big news all around, except not so much in the the state itself.

But as I pointed out, the really key point is that the immediate problem facing Harrisburg is nothing about any revenue or expenditure problem with the Harrisburg municipal government.  The problem on their immediate horizon is the result of having guaranteed bonds for a distinct government entity called the Harrisburg Authority which borrowed money to build an incinerator.   It really is all a story about government fragmentation and governance in Pennsylvania.  If I had time I would make a Pennsylvania version of what the fragmentation story looks like in the Pittsburgh region in itself.. Can you imagine what that would look like?.. but the story is awfully similar across most of the state. Is there any real understanding of the overlapping risk issues in local public around here such as what caught up Harrisburg? 

But there is other stuff percolating in Harrisburg that could be productive.  A bipartisan effort is working on banning the use of credit default swaps in municipal finance.   Just about anything that uses the word bipartisan in Harrisburg these days (or DC for that matter) should generate reams of coverage.  Also a bit too wonky to really get much notice.

Just to finish up on public finance... No, I really don't think Pennsylvania law would ever have a similar result here.  But there is an awful lot of buzz in certain circles over a very recent legal ruling in Illinois that stripped the property tax exemption from one of their health systems.


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