Will Reading ever get out of the ACT 47 plan?

First, you might be asking what is ACT 47? Well technically the Act 47 is actually named the Financially Distressed Municipality Act. It’s primary goal is to help is to help financially distressed towns thorugh the restructuring of it’s debt, helps municipalities gain extra government funding through either loans or grants, and finally and if necessary gives the state the ability to declare the municipality bankrupt.  Out of some 500 plus cities and municipalities in PA, Reading became the 19th such municipality determined to be financially distressed.  Since it’s inception, not one municipality has ever left the the Act 47 program.

The primary reason for this as stated in a Reading Eagle article written back in 2009, which states:

“No city has emerged from Act 47, in part because none can afford to lose the benefits the program provides.

For example, officials with several of the cities told the Reading Eagle they can’t pay for their operations without revenue from the nonresident wage tax.

That tax isn’t available normally, and the Act 47 cities would have to give it up if they left the program.”

In that same exact article, Mayor McMahon envisioned Reading getting out of Act 47 in two years. I find that very hard to believe, looking at the figures that the City of Reading submitted to the State of PA  contradicts Mayor McMahon assertion that Reading will hopefully get out of the Act 47 plan. According to those figures: “Expenditures have exceeded revenues by more than 20% in 2003, 2004, and 2006 and over 10% in years 2007, 2008 and 2009.”  With decreasing revenues coming from an already strained state government, which is having a hard enough time staying afloat without  help from the federal government. So to answer my previous question of this post, will Reading ever get it self out of the Act 47 plan? I would say that sounds highly, highly unlikely!!

If you  are interested in checking out Reading PA’s Act 47 plan check out this websites:



act47.pdf (application/pdf Object).



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