Harvey City Council Unanimously Votes for State Intervention Under Financial Distress Law

Harvey, Illinois – The City Council of Harvey, Illinois, has unanimously passed an ordinance seeking state oversight under the Illinois Financially Distressed City Law. This critical vote, which occurred recently, follows Mayor Christopher Clark's declaration of the city's severe financial distress and his announcement of an imminent partial shutdown of city government services. The move positions Harvey as a significant case study for other Illinois municipalities facing similar fiscal challenges.

The Illinois Financially Distressed City Law (Public Act 100-0033) grants the state broad authority to intervene in a city's financial affairs to ensure its continued operation. Harvey's application requires the city to meet specific criteria, including being in the top 5% of tax rates and the bottom 5% of tax collection. This law has been invoked only once before, with East St. Louis receiving the designation in 1990.

Harvey has contended with turbulent finances for years, marked by substantial pension shortfalls, budget deficits, and a history of scandals. Mayor Clark attributed the dire situation to overwhelming debts and legal obligations inherited from previous administrations, combined with chronically low tax collection rates. He stated, "The amount that’s lost by the defaulting property taxpayers, that 25 to 27 million, puts us in a hole so deep that we can’t even meet our obligations."

The city's pursuit of state oversight is a last resort, as Illinois lacks a process for financially distressed municipalities to declare bankruptcy. Austin Berg highlighted the significance of this development, stating in a recent tweet, "> NEW: The first domino toward insolvency for distressed local governments across Illinois just tipped. Last night, the city of Harvey unanimously passed an ordinance seeking state oversight under Illinois’ Financially Distressed City Law." This underscores the potential precedent Harvey's situation could set.

While the ordinance passed unanimously, the decision was not without contention, with some council members and residents expressing frustration over the handling of the crisis. Second Ward Alderperson Colby Chapman, a vocal critic of the mayor, voted in favor, hoping state oversight would bring much-needed transparency. Chapman remarked, "I voted in favor of it because I believe that the state can really provide financial oversight in a way that I’ve never historically seen with the city of Harvey." The state will now review Harvey's appeal to determine if it qualifies for the distressed status.