Pennsylvania’s capital city is still digging out from a deal that broke it financially—a calamity that mirrors the way Trump built his own empire.
Anyone who’s visited Harrisburg, Pennsylvania, knows that it’s an idyllic city situated on the Susquehanna River. Donald Trump should know that, too, after holding a chaotic rally there in April, and after speaking in nearby Mechanicsburg on Monday night.
But during a speech in Northern Virginia on Tuesday, Trump said Harrisburg “looked like a war zone.” He apparently meant that it looked like a war zone from the lofty view from his plane on Monday night, according to The Guardian’s Ben Jacobs. Picture the Donald, slicing into a piece of Original Recipe with fork and knife, peering down on Harrisburg with disgust.
It’s an odd comment for a couple of reasons. Harrisburg, home to Pennsylvania’s capitol building and more than a dozen stately bridges, is a handsome place. Maybe Trump was looking down on somewhere else—though it’s safe to say that the Republican Party’s presidential nominee should not be dissing any place in Pennsylvania.
The city’s director of communications described Trump’s comments as “an unfortunate mistake” and called Harrisburg a “capital of unique beauty and charm” in a statement. Yes, the city went so far as to release a statement to defend its good looks.
It’s also an odd gaffe—though “gaffe” may not be the word for it, since that would imply a degree of shame on the campaign’s part—because Harrisburg really, really likes Trump. He received more votes in Dauphin County during the primary than any candidate on either side of the aisle.
Trump’s comment has already been elevated to the status of political football in the state. Katie McGinty, the Democratic candidate for the junior U.S. Senate seat in Pennsylvania, tweeted that Trump “definitely doesn't know what a warzone looks like”—a barbed riposte, since Trump is taking heat for accepting a Purple Heart offered to him by a veteran.
It’s Harrisburg that needs to take Trump’s attitude to heart. A deal that broke the city financially mirrors the way that Trump built his empire. Harrisburg is paying a high price for its mistakes. The city ought to see in Trump the same blasé attitude toward debt and deals that led to its own present predicament.
Harrisburg nearly declared bankruptcy in 2011 over the staggering debts it incurred from a botched retrofit of a waste-to-energy recovery facility, usually referred to as an incinerator. That’s right: One garbage fire nearly knocked out Harrisburg, and now another one is calling the city ugly.
Instead of bankruptcy, Harrisburg went into a court-ordered state receivership, from which the city emerged two years ago. As The New York Times reports, many in the city still feel that Chapter 9 would have been a better option for Harrisburg. Bankruptcy would have forced bondholders and creditors to take a haircut on the restructured $345 million debt. Harrisburg and Dauphin County residents are instead responsible for the full debt load, which will be paid off primarily through revenue generated by the city’s parking garages.
According to The Patriot-News, under the new dispensation, the city’s parking garages are more cost efficient. But Harrisburg Mayor Eric Papenfuse objects to what he has described as arbitrary changes to the budget for the new parking garage authority. In a letter earlier this year, Mayor Papenfuse said that the authority changed the “waterfall” payments due to Harrisburg—the money left over after expenses and debt-repayment obligations.
“The budget for Harrisburg's parking system this year shortchanges the city by nearly a million dollars, but pays full bonuses, including 5 percent increases, to parking managers,” The Patriot-News reports.
Harrisburg is out of state receivership now, but the city is still a distressed municipality. As Mayor Papenfuse told City Journal in 2014, advocates for Chapter 9 were wooed by “magical thinking” that the city could escape its debt obligations. The city has yet to step out of the long shadow cast by former Mayor Stephen Reed, who struck a bad deal with an unscrupulous developer for the incinerator—among many others. Mayor Reed was so profligate about using municipal bonds that he once used public debt to buy $5 million in artifacts, including a pistol once owned by Doc Holliday, for a Wild West museum that never materialized.
“The city’s predicament ought to be a warning to other cities that use borrowing to finance projects of questionable economic value. Often, the rationale that politicians give voters for such projects is merely the existence of a gleaming new facility in a competing town,” wrote Steven Malanga, a senior fellow at the Manhattan Institute, in 2010, as the specter of bankruptcy still lingered over Harrisburg. “But the true measure of costly developments should be whether they generate economic improvement and fiscal stability over the long term—and judged by that criterion, they often fail, as they have in Harrisburg.”
As a developer, Trump has operated on principle that bankruptcy is cost-free. Trump has paid little for his failures: He has folded personal debts into his casinos’ bankruptcies while collecting millions in salaries and bonuses. Trump’s casinos have suffered from “high debt and lagging revenues,” according to The New York Times—problems that have plagued Harrisburg.
Harrisburg doesn’t need another leader like Mayor Reed, who pursued unsound investments on the theory that, when all else fails, bankruptcy will wipe the slate clean. Harrisburg surely doesn’t need to support a businessman with unscrupulous views about bankruptcy—who, on top of that, also thinks the place is an eyesore.