2014-05-02T113212Z_1_CBREA410W1U00_RTROPTP_2_USA-PENNSYLVANIA-MUNICIPALS

Broke Shamokin, Pennsylvania, seeks state crutch that few cast off

A man walks down Market Street with darkening clouds forming above the bluff in the distance in ShamokinBy David DeKok HARRISBURG, Pennsylvania (Reuters) – Shamokin, Pennsylvania, tucked away in the coal country about 120 miles northwest of Philadelphia, has $800,000 of unpaid bills and can’t get a loan from a bank. Just seven of the 27 local governments to enter state oversight under the program, known as Act 47, have ever been released from it. As a result, legislators want to cap how long cities can stay under state oversight and, in the hardest cases, impose a municipal death penalty that amounts to disincorporation and a state takeover. The law was passed in a bid to help Pennsylvania cities battered by the decline of the American steel industry in the 1970s and ’80s.

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