Pa. senators target municipal swaps, loan deals
HARRISBURG, Pa. (AP) -- Four Pennsylvania state senators are targeting gaps in municipal borrowing laws that they say were exposed by the massive debt the city of Harrisburg piled onto its municipal trash incinerator.
The senators said Wednesday they plan to introduce a package of bills built on testimony from committee hearings last fall on how Harrisburg accumulated the debt.
One bill would limit local government guarantees of municipal authority borrowings and bar them from charging a fee for a guarantee. Another bill would ban complicated financial deals known as interest rate swaps.
Sens. Rob Teplitz, John Blake, John Eichelberger and Mike Folmer say Pennsylvania's school districts and local governments had more than $17 billion in debt tied to swaps from 2003 to 2012. Folmer says swaps are gambling with taxpayers' money.