Franklin Borough exits Act 47

The Pennsylvania Department of Community and Economic Development announced on Tuesday that Franklin Borough’s status as a distressed municipality under Act 47 has been terminated.

The purpose of Act 47, or the Municipality financial recovery act, is to provide help with fiscal management, planning as well as financial aid. The borough initially entered the program due to distress that can be traced back to the 1977 Johnstown flood and then the 1988 collapse of the steel industry. Though some residents might be worried about the implications of leaving the program, officials ensure us that the effects will be positive.

“Now the day to day operations should be smoother without the cloud of being distressed hanging over them," said Rick Vilello, Deputy Secretary for Community Affairs and Development, DCED. "Maybe get some business interest, maybe some people buying houses, some properties sold but day to day they shouldn’t see anything different.”

Cambria county had two municipalities in the program. Franklin Borough, and the city of Johnstown. Johnstown has been working on an Act 47 exit plan since 2018 and officials say that we can anticipate an official exit as early as spring 2023.

“The public hearing went very well," said Vilello. "Once that transcription comes back from the public hearing it’ll go to the secretary for a determination. We expect the secretary to determine what we believe is the ready to exit. Then we’ll coordinate the exit ceremony and them leaving Act 47, I think we’re shooting for the middle of April.”

In its 2023 budget message, the city of Johnstown stated that leaving the act will force the local services tax to experience a significant decline as municipalities in Act 47 are allowed to charge a significantly higher LST rate. Officials however, assure us it will remain the same.

“I would expect that the local services tax will remain at 1.56 just because that income is needed," said Vilello. "But again, the benefit will be for possible economic development or people looking to buy houses. When they go online and do their research they’re not faced with a distressed community.”

Helpful Links:

City of Johnstown Act 47 Exit Plan

City of Johnstown Budget Message

Pennsylvania Department of Community and Economic Development

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