Apr. 30—JOHNSTOWN, Pa. — Johnstown's economy and municipal government were in dire straits in the late 1980s and early 1990s, leading up to the decision to enter Pennsylvania's Act 47 program for financially distressed municipalities.
With Bethlehem Steel Corp. collapsing, more than 10% of the population was unemployed, and the decline in tax revenue forced the city to borrow more than $5 million. Moody's Bond Record gave Johnstown a speculative Ba rating.
Johnstown lost more than $1 million for its annual budget when a federal revenue-sharing program stopped.
Deep divides existed among elected officials. A one-week government shutdown occurred.
The population continued what is still a century-long slide. The median income was less than $15,000 per year among those who remained. Approximately 5,600 crimes took place in 1991.
Johnstown was in "total disarray," as Donato Zucco, who was then on City Council, explained.
Then two changes occurred.
Citizens voted to do away with the strong-mayor format and bring in a city manager instead.
And, on Aug. 21, 1992, Johnstown went into Act 47 — which it finally exited on Friday after more than 30 years of participation.
At the time, Johnstown met three of the necessary criteria to enter the program: spending exceeded revenue for at least three years; a deficit of at least 1% existed over the previous three years; and municipal services declined when the city reached its taxing limit.
"The idea was we would have outside professionals...
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