The Municipalities Financial Recovery Act (Act 47) Grant Program

The Act 47 program, administered by the Pennsylvania Department of Community and Economic Development (DCED), is designed to assist financially distressed local governments in the Commonwealth of Pennsylvania. It provides both loan and grant funding to support municipalities that are facing significant fiscal challenges. The program is implemented through the Center for Local Government Services and seeks to restore fiscal stability and financial integrity in municipalities that meet distress criteria under Pennsylvania law. The primary objective of Act 47 is to provide the resources necessary for municipalities to develop and implement financial recovery plans. Eligible applicants include financially distressed local governments, which are identified based on fiscal indicators as outlined in the program's official guidelines. Once designated as distressed, municipalities become eligible to receive both financial assistance and technical guidance through the program. Funding under Act 47 is variable and determined on a case-by-case basis depending on the severity of financial distress and the specific needs of the municipality. The funds can be used for a variety of purposes related to financial recovery, including covering operational deficits, debt restructuring, and implementing cost-saving measures. A key feature of the program is the development of financial recovery plans, which are often prepared with the help of third-party consultants funded through the program. These plans serve as roadmaps for returning to fiscal stability and outline both short- and long-term measures for revenue enhancement, expense reduction, and management reform. The application process is facilitated through the Center for Local Government Services within DCED. Interested municipalities must demonstrate eligibility by meeting specific fiscal criteria, which may include deficits in operational budgets, default on debt payments, or failure to meet payroll obligations. While the application instructions and deadlines are not detailed in the overview, municipalities typically work closely with the Center to begin the assessment and application process. Additional guidance and support are provided throughout the submission and recovery plan development phases. Evaluation of applications is based on the municipality’s level of distress and their readiness to engage in a structured recovery process. Once a municipality is accepted into the program, DCED provides oversight, technical assistance, and monitors the implementation of recovery strategies. Municipalities may be required to submit regular updates and demonstrate progress towards recovery benchmarks. The timeline for funding under Act 47 varies by case. There is no fixed application window or deadline, and applications may be accepted on a rolling basis depending on the emergence of financial distress in different jurisdictions. The program is recurrent in nature, reflecting its role as a support mechanism for any municipality that enters financial crisis at any point in time. Contact with the Center for Local Government Services is recommended for those seeking more detailed guidance. A case study from Altoona (2018) is also available for reference, highlighting a successful engagement with the program.