HARRISBURG, Pa. — The $4-per-hour cost of street parking in downtown Harrisburg is emerging as a significant obstacle to the city’s economic recovery, according to business owners and officials. The issue was raised during a recent tour of downtown businesses by Pennsylvania Governor Josh Shapiro and Rick Siger, the state’s secretary of community and economic development.
The high parking rates, similar to those found in larger cities like Philadelphia and Pittsburgh—and even parts of New York City—are a direct result of a complex financial situation stemming from 2013. Facing insolvency, Harrisburg borrowed hundreds of millions of dollars, securing the debt with future parking system revenue. The city then transferred control of the system to a private operator to address its financial woes.
Harrisburg Treasurer Dan Miller described the situation as a “total mess” in an interview Monday, explaining that the current rates are necessary to cover not only the costs of maintaining parking facilities but also to service the substantial debt unrelated to parking operations. This contrasts sharply with nearby cities like York, which retains control of its parking system and charges a significantly lower rate of $1.50 per hour.
The city’s predicament raises the question of whether alternative solutions were available in 2013, and whether Harrisburg can now extricate itself from the current arrangement. According to Miller, the answer to both questions is a qualified yes.
City leaders in 2013 considered filing for bankruptcy, a move that could have potentially wiped out a significant portion of the debt. Miller pointed to Detroit’s bankruptcy as a case study, noting that the city ultimately paid only 25 cents on the dollar for its obligations, shifting much of the financial burden to outside stakeholders.
However, then-Governor Tom Corbett opposed Harrisburg’s bankruptcy filing, a decision that meant city residents and businesses would bear a greater share of the financial pain. “In a sense, bankruptcy is bad,” Miller said. “I don’t want to go bankrupt. You don’t want to go bankrupt.” But, he added, it can be the most effective way “to reboot and start over.”
The Harrisburg situation is not unique. Chicago, which sold its parking system in 2008 for $1.15 billion, now charges drivers as much as $7 per hour for street parking. Recent discussions about a potential buyback of the system were abandoned after facing criticism for potentially being an even worse deal than the original sale.
While Harrisburg theoretically could regain control of its parking system—which was technically mortgaged rather than sold—it would require approximately $362 million to cover the outstanding debt as of the end of 2024, according to Park Harrisburg financial statements. However, the city currently lacks the funds to make such a purchase.
State Secretary Siger indicated that the state is exploring ways to assist Harrisburg with its parking challenges as part of a broader effort to revitalize the downtown area. The Department of Community and Economic Development has been contacted for further details on potential state assistance.
Miller suggested that increasing the number of state workers returning to downtown Harrisburg could provide a boost to the local economy. Fewer than half of Dauphin County-based state workers currently spend at least three days a week in the office, but Governor Shapiro recently announced plans to encourage more frequent in-office attendance.
The high cost of parking is creating a series of negative consequences for Harrisburg. It discourages visitors, reduces overall parking revenue, contributes to business closures, and ultimately diminishes the city’s tax base. Businesses are struggling, leading to lower mercantile tax revenues, and owners of emptying commercial buildings are appealing for lower property tax assessments.
Harrisburg is not only failing to make progress on its debt but is also accumulating additional costs through “accreted interest,” a financial tactic used to make projects appear more viable. Miller expressed his opposition to the use of accreted interest for government entities, arguing that it should not be permitted.
