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The Plight of Third Class Cities
March 24, 2010

Hello. And welcome to At the Center.

Over the past few months, there has been a growing amount of media attention paid to the plight of third class cities in Pennsylvania, of which the City of Lancaster is one.

The city of Reading has been officially designated as “distressed” by the state; the City of Harrisburg teeters on the brink of municipal bankruptcy; and the City of Lancaster was forced to raise taxes 25%, lay-off firefighters and other personnel and dip into reserves to make their 2010 budget balanced. Truth is, this story is repeating itself throughout Pennsylvania as cities and other local governments struggle to make ends meet while maintaining essential services.

For the past few months, The Chamber has been looking into this issue through a task force chaired by board member Pete Scudner. We have also been working with other chambers throughout the region to explore potential solutions for our state’s cities. And, we have participated in a series of meetings with Mayor Gray. Our work has been somewhat eye-opening and has prompted us to action.

First off, let me state the obvious…the future success of Pennsylvania’s cities is an issue that should be important to all of us. It isn’t just a city issue; it isn’t just a county issue; it is, in fact, a statewide business climate issue that demands attention. Ignoring this issue will have a chilling effect on our state and local economy.

Secondly, while more tax revenues is often the first place people go toward finding a solution, the fact is that as long as the state-mandated structural issues continue for our cities, more money will never be the real solution. Additional revenue will not remove the longer-term, systemic obstacles that must be addressed in order for our cities to thrive. More specifically, structural issues demanding immediate attention from state officials include: binding arbitration; pension reform; shared services and intermunicipal cooperation; privatization; local tax reform; and incentives for urban economic development.

Earlier this month, our Task Force made a recommendation to our Board of Directors that calls on The Lancaster Chamber to play a lead role in developing solutions to this pending –if not current—crisis. We intend to work collaboratively with at least five other regional chambers to focus our efforts on the state level and advocate for changes designed to ensure the future success of our cities.

In short, we need to start a grass roots movement that is in the best, long-term interest of our membership.

If Lancaster County is going to live to the potential of The Chamber’s mission of building Lancaster County into a model of prosperity for 21st Century America, a vibrant City is essential. We welcome your input and ideas on this issue but most importantly we need your engagement. We will all be better off because of it.

Until next time. Stay informed, stay engaged and stay with us, At the Center.

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