Harrisburg mayor's financial woes

Recently, she's getting what may be even more embarrassing news -- about her personal finances, which are also in arrears.

This week the mayor, who earns $80,000 a year, was hit with a double dose of personal trouble. A local bank, Metro Bank, filed a $52,000 mortgage foreclosure against her for a house she owns here. Her spokesman, Robert Philbin, said she was "surprised'' to hear about the foreclosure. Then it was disclosed she owes almost $1,100 in delinquent school taxes for 2010 and hasn't made a payment since May. 

She has since paid the tax bill.and she has also made the overdue mortgage payments on the building.

And she isn't the only official of the capital city who's in financial trouble -- a city that recently lost a bid for federal bankruptcy protection and which is now being run by a state-appointed receiver, David Unkovic of the Department of Community and Economic Development.

In October a city councilwoman, Susan Brown-Wilson, was said to owe $800 in taxes on a downtown property, a problem she blamed on her husband for not paying. And a city school board member, Tiffeny Penn, must go to court later this month for allegedly writing $1,250 in bad checks.

What's going on?

"Can anybody in Harrisburg city government count to 10?" said Eric Epstein, a frequent critic of state and city government. "The mayor's making $80,000 a year but can't pay her mortgage? If you can't balance your personal checkbook, you're not qualified to manage public money.''

Franklin & Marshall political pollster G. Terry Madonna said he wouldn't draw "a direct correlation'' between officials' personal financial woes and the city's growing debt, "but it's certainly symbolic of the plight of the city. Harrisburg faces an enormous fiscal problem, while the mayor is unable to pay the mortgage on her property. Its symptomatic of the city's dire situation.''

The building the bank is foreclosing on is called the Loveship Inc.,for which she got a $60,000 loan in 2007. It was headquarters for a nonprofit agency  Thompson ran until 2009, when she was elected mayor. Ironically, the agency counseled people who were having trouble paying their mortgages.

"How does a mortgage counseler fall behind on her mortgage?'' said  Epstein. "This is absolute insanity. A mortgage counseler defaults on her own mortgage, thanks to her inability to manage money? She's making $80,000 a year. She should have her mortgage paid through electronic transfers'' to the bank.

At first, mayoral aide Philbin said her personal finances were unrelated to the city's growing debt, which is due mainly by poorly structured borrowings on a malfunctioning city incinerator that occurred before she became mayor. But the city's general budget is also out of balance, with spending higher than income.

But citizens jumped on the mayor's fiscal situation at a public meeting one night last week to discuss the city's fiscal plight.

"What's the deal, mayor?'' one man asked.

She said she had missed two mortgage payments totaling $900 and called it "an oversight.'' She insisted has plans to pay what she owes and avoid a sheriff's sale. As for the overdue taxes, she said, "I'm human. I am on a payment plan.''

"I'm not ashamed'' about the personal finances, she said. She said the city finances that she inherited from previous Mayor Stephen Reed, which she took over in January 2010, were "a mess.'' She said she hadn't filed for bankruptcy, as four city council members tried to do for the city, but were refused by a federal judge.

As for people who owe back taxes, "I encourage them to get on a payment plan.''

Thompson insists she still plans to work with receiver Unkovic, who was appointed by Gov. Tom Corbett and approved by a Commonwealth Court judge, to resolve the city's debt and balance sheet problems. He has a month to come up with a plan to erase the debt and balance the budget.