From FT.com:

On Sunday, Ed Rendell, the governor of Pennsylvania, announced a $4.3m cash transfer and said missing the bond payment was “not an option”. “Harrisburg’s financial future is still very cloudy, and difficult decisions still need to be made to return this city to financial stability,” he said in a statement. “Allowing a missed bond payment, however, would not be a good decision.”

Harrisburg’s strains have been closely watched as other US local governments and states struggle to close gaps in their budget amid falling tax revenues in the downturn.  Read more.