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August 1, 2012 | By | Posted in General News

Dermody says authority debt may need new regulations

Rep. Frank Dermody

By Melissa Daniels | PA Independent

HARRISBURG — In Pennsylvania, there are many examples of a quasi-governmental authority’s debt sickening a city’s financial health.

And leading state lawmakers are beginning to notice.

When PA Independent asked House Minority Leader Frank Dermody, D-Allegheny, what the state could do to keep quasi-governmental authorities from taking on too much debt, he said any regulation would need to be in line with the state Constitution, but something must be done.

These authorities charge ratepayers based on service usage — like water or sewer use — and on project-related debt. But Dermody questioned the purpose of the debt.

“Some of the disasters we’ve seen indicate we ought to take a look at what they’re doing,” Dermody said.

The Senate Local Government Committee recently announced it will hold a public hearing on the debt related to an incinerator project in the city of Harrisburg. The project racked up more than $300 million in debt, and the city is trying to sell the incinerator. State leaders, however, say they’ll be taking a look at what laws might needed to keep that from happening again.

In northeastern Pennsylvania, the Scranton Parking Authority carries $150 million worth of debt.

Watch Dermody’s full response below:

Want more video from PA Independent? Head to our YouTube account to hear from Dermody about voter ID – and why his own ability to vote might be in question.

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Melissa Daniels is a reporter for PA Independent. She can be reached at 717-350-0962 or Melissa@PAIndependent.com

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