Shapiro Administration Announces End of Hazleton’s Distressed Municipality Status Under Act 47

Hazleton, PA – Today. Department of Community and Economic Development (DCED) Secretary Rick Siger announced the approval of Hazleton’s exit from distressed municipality status under the Municipalities Financial Recovery Program, known as Act 47. Secretary Siger joined Hazleton mayor Jeff Cusat and other officials in the Luzerne County city this afternoon to commemorate the occasion.

The Shapiro Administration, focused on boosting Pennsylvania’s economy, knows the importance of strengthening our communities to make the Commonwealth a better place to live, work, and prosper.

“Congratulations to the local officials, community leaders, businesses, and residents of Hazleton for working together to make this day a reality,” said Secretary Siger. “Governor Josh Shapiro knows that strong, healthy municipalities are essential to grow our economy, and his first budget proposal includes significant investments to build economic prosperity for our businesses, workers, and communities. I look forward to seeing Hazleton flourish as we work together to bring new investment, jobs, and projects to the city in the years ahead.”

Secretary Siger signed a formal determination letter finding that termination of the city’s distressed status was appropriate under Section 255.1 of Act 47. The decision was made due to Hazleton’s ability to effectively utilize the tools offered through the program to significantly improve its financial position and management infrastructure since entering Act 47.

“The city is very appreciative for the dedication and commitment that the state has towards the future of Hazleton,” said Hazleton Mayor Jeff Cusat. “I’d like to thank everyone who worked so hard to make this day a reality.”

Hazleton was designated as distressed on September 12, 2017 under Act 47. The determination was made because the city had experienced multiple years’ deficits and was met with the prospect of not paying obligations to vendors and employees. Gerald Cross of the Pennsylvania Economy League was subsequently appointed the Act 47 Coordinator for the city.

“Hazleton is an example of how providing municipalities with more flexible revenue options, like an enhanced earned income tax, and updating antiquated county property assessment can help communities overcome distress and become sustainable,” said Gerald Cross, Pennsylvania Economy League Senior Fellow. “However, none of this would have been possible without extensive cooperation between the mayor and Hazleton City Council. Having municipal leadership working together for the common good is critical to success.”

Hazleton made significant strides to improve its management practices and fiscal situation. The city experienced an excess of revenues over expenditures for the years 2018-2021 and, based on the adopted 2022 budget and the Act 47 Coordinator’s end of year estimate, is estimated to incur a surplus of $573,683 in 2022. Hazleton’s debt is manageable, and able to be included in the annual budget. The city has also confirmed that there are no claims and/or judgements that would materially impact its financial condition currently or in future years. And finally, projected revenues of the city are sufficient to fund ongoing necessary expenditures, including pension and debt obligations and the provision of municipal services.

Hazleton is the 22nd municipality to recover from distressed status under act 47. Prior to Hazleton, Johnstown, Cambria County, was the most recent community to recover, exiting Act 47 status on April 26, 2023. For a full list of the municipalities who have recovered from distressed status under the program, please click on the Act 47 Financial Distress page of the DCED website.

Act 47 was enacted to provide a broad-based program of fiscal management oversight, technical assistance, planning, and financial aid to municipalities experiencing severe fiscal distress.

Governor Shapiro and his Administration are committed to strengthening communities and growing Pennsylvania’s economy so that it works for everyone. For more information about his commitment to workers, businesses, and our economy, visit the Governor’s website.

For more information about Act 47 or the Department of Community and Economic Development, visit DCED website, Facebook, Twitter, and LinkedIn, and be sure to tag local small business on social media with #PASmallBiz23 or #GiveLocalSomeLove. 

MEDIA CONTACT:
Penny Ickes, DCED, dcedpress@pa.gov