Will Harrisburg, capital of Pennsylvania, file bankruptcy?

Harrisburg, PA has a population of about 50,000 for its tax base. The city is having difficulty handling debt of $300 million for an incinerator (guess why they had to buy it). They have considered bankruptcy to get out from under the debt, but that will destroy their bond rating. Compare this with Midlothian, Texas, a small town with a population of 11,834 according to the 2010 census. Before a successful vote to fund more school construction and the straightening of a road in front of a future second high school, to the tune of $97 million, Midlothian already was in debt for $320 million in school bonds. Now it is preparing to pitch its voter-approved $97 million ISD bond to those willing to buy them this August/September time-frame. The total debt is $417 million.

Let's do the math. Harrisburg, PA incinerator debt of $300 million divided by 50,000 people is an approximate cost of $6,000/person. Midlothian, TX ISD bond debt total of $417 million divided by 11,834 people is an approximate cost of $35,237 per resident. Midlothian's current bond rating is an A- which is the lowest bond rating before becoming seriously risky to investors. The ISD bond was pitched with the idea that interest rates are low so it's a good time to do this. Yet foreclosures are up, as even in Texas unemployment is a problem. Taxes were kept low before the vote and are poised to go up now that there is increasing debt. Still, voters enthusiastically fell for this. What will the interest rate be to entice investors to loan Midlothian ISD money for their planned building projects? We shall soon see. Harrisburg, PA should be able to meet its bills and avoid bankruptcy. Midlothian, TX would be well advised to table its plans to borrow $97 million more when it is already deeply in debt during economically stressed times.

So how much bond debt does your town owe?