Pennsylvania's Harrisburg balances budget through transactions

NEW YORK Mon Dec 23, 2013 6:06pm EST

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NEW YORK Dec 23 (Reuters) - Harrisburg, Pennsylania's fiscally troubled capital, will have a balanced budget through 2016 after the sale of the Harrisburg incinerator and the leasing of the city's parking lots, the state governor said on Monday.

Governor Tom Corbett said the combined transactions remove $360 million in debt on the incinerator. The transactions were a critical component of the recovery plan for the cash-strapped city.

"As cities throughout the country face dire fiscal emergencies, we have never given up on Harrisburg and its people," Corbett said in a statement.

The city filed for bankruptcy in 2011 but state lawmakers barred it, and it has not paid its general obligation debt service since March 2012.

Harrisburg's recovery plan was approved by a court and crafted by the city's state-appointed receiver, William Lynch.

"While there is still much work to be done, these transactions provide the city officials the tools to craft a predictable and stable economic future," Lynch said.

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