# Financially Distressed Municipalities Act

The Financially Distressed Municipalities Act (Act of 1987, P.L. 246, No. 47), also known as Act 47, is a Pennsylvania statute outlining procedures to stabilize municipalities in Pennsylvania undergoing financial distress. The Act empowers the Pennsylvania Department of Community and Economic Development to declare certain municipalities as financially distressed. It provides for the restructuring of debt of financially distressed municipalities, limits the ability of financially distressed municipalities to obtain government funding; authorizes municipalities to participate in federal debt adjustment actions and bankruptcy actions under certain circumstances; and provides for consolidation or merger of contiguous municipalities to relieve financial distress.

## History

Most provisions of Act 47 initially remained suspended until the termination of the Pennsylvania Intergovernmental Cooperation Act (Section 708 of Act 1991, June 5, P.L. 9, No 6).
The cities of Erie and Altoona, among others, have narrowly avoided Act 47 designation. Their mayors seek legislative changes to the binding arbitration rules of Act 111, as well as a reduction in the designation of tax-exempt properties, to improve their financial health.

### Benefits of Act 47

Although some municipalities (listed in the chart below) have had the Financially Distressed designation removed, most cannot afford to lose the benefits Act 47 provides. The benefits include revenue from the nonresident wage tax available only to cities with Act 47 status.

### Distressed municipalities

The following municipalities were designated as part of the Municipalities Financial Recovery Program as of the date indicated. Any dates of imposition and lifting of sanctions, and the rescinding of the initial designation are also noted.
| Municipality | County | Designated | Sanctioned | Sanction rescinded | Designation rescinded |
| Aliquippa | Beaver | December 22, 1987 | | | December 1, 2023 |
| Altoona | Blair | April 1, 2012 | | | September 13, 2017 |
| Ambridge | Beaver | April 10, 1990 | | | April 16, 1993 |
| Braddock | Allegheny | June 15, 1988 | | | July 19, 2023 |
| Chester | Delaware | April 6, 1995 | | | |
| Clairton | Allegheny | January 19, 1988 | | | November 24, 2015 |
| Colwyn | Delaware | May 6, 2015 | | | April 29, 2022 |
| Duquesne | Allegheny | June 20, 1991 | | | October 15, 2023 |
| East Pittsburgh | Allegheny | November 13, 1992 | | | December 27, 1999 |
| Farrell | Mercer | November 12, 1987 | | | February 8, 2019 |
| Franklin | Cambria | July 26, 1988 | | | January 31, 2023 |
| Greenville | Mercer | May 8, 2002 | | | November 9, 2023 |
| Harrisburg | Dauphin | October 20, 2010 | | | |
| Homestead | Allegheny | March 22, 1993 | | | March 28, 2007 |
| Johnstown | Cambria | August 21, 1992 | | | April 28, 2023 |
| Mahanoy City | Schuylkill | February 18, 2016 | | | February 23, 2023 |
| Millbourne | Delaware | January 7, 1993 | | | March 11, 2014 |
| Nanticoke | Luzerne | May 26, 2006 | | | May 3, 2016 |
| New Castle | Lawrence | January 5, 2007 | | | December 12, 2023 |
| Newville | Cumberland | August 9, 2023 | | | |
| North Braddock | Allegheny | May 22, 1995 | | | April 11, 2003 |
| Pittsburgh | Allegheny | December 29, 2003 | | | February 12, 2018 |
| Plymouth | Luzerne | July 27, 2004 | | | May 3, 2016 |
| Rankin | Allegheny | January 9, 1989 | | | May 24, 2023 |
| Reading | Berks | October 14, 2009 | | | July 14, 2022 |
| Scranton | Lackawanna | January 10, 1992 | January 1, 1999 | November 22, 2002 | January 25, 2022 |
| Shamokin | Northumberland | June 16, 2014 | | | August 20, 2024 |
| Shenandoah | Schuylkill | May 20, 1988 | | | April 16, 1993 |
| West Hazleton | Luzerne | March 27, 2003 | | | October 21, 2014 |
| Westfall | Pike | April 14, 2009 | | | October 12, 2014 |
| Wilkinsburg | Allegheny | January 19, 1988 | | | November 10, 1998 |
* List of Act 47 Municipalities