http://triblive.com/x/pittsburghtrib/news/s_672744.html
The small town of Westfall in Pike County this month quietly became the first municipality in Pennsylvania to declare bankruptcy.
It might not be the last.
"A train wreck is coming, and, because of my position, I think it's my duty to alert people," said George Cornelius, secretary of the state Department of Economic and Community Development. "Some of these municipalities may get into a situation where they have no choice; bankruptcy is the only option left."
Cash-strapped municipalities suffering from the industrial decline, population loss and overwhelming tax increases common in the Rust Belt face a "downward spiral," Cornelius said. He wouldn't single out cities but said a major reason is that Pennsylvania is bloated with local governments and many resist cutting costs through government consolidation with neighbors.
"We have municipal boundaries that were drawn in a different era that bear no relationship to current economic realities," he said.
Act 47, the state-managed safety net that provides "financially distressed" cities with state-prescribed recovery plans while requiring them to cut costs, "failed in its essential purpose," Cornelius told the House Appropriations Committee last month. In November, he predicted that "financial distress is almost assured" for all mid-size and large cities in the state.
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