Scranton is one of 12 cities going bankrupt – all of them are in the liberal states. Cities can’t print money and the costs are going up so people are moving out, reducing the tax base. It’s a perfect storm.
The The Times-Tribune of Scranton is reporting that city workers, including Firefighters, Police, Machinists and Aerospace workers, in the city of Scranton got a temporary pay cut down to the minimum wage of $7.25 an hour.
The Mayor said that once the crisis is over, the workers will receive their deferred pay. The mayor wants the crisis dealt with by huge tax increases.
Every single city worker, 398 in all, had their pay cut immediately. The Mayor has reduced his own pay to hourly wage. The reason – there is simply no money in the coffers to pay them.
The Democratic Mayor, Chris Doherty, and the Democratic Council are at odds and can’t solve their differences over how to handle their lack of funds. It’s similar to what we see going on between our president and congress.
The Mayor wants to raise taxes and the Council wants to find other sources of revenue — such as payments from tax-exempt non-profits like local universities. One council member supports privatizing the city’s garbage collection and sewer authority to raise revenue.
A Lackawanna County Court held the Mayor in contempt and told him to pay his city workers, but he is ignoring the order.
The International Association of Firefighters Local 60, the Fraternal Order of Police E.B. Jermyn Lodge 2 and the International Association of Machinists and Aerospace Workers Local Lodge 2305 will file suit in federal court. Everyone is suing the Mayor – more money wasted.
The city has been in trouble for two decades because of financial problems and declining population. They have a $16.8 million budget gap in an 85 million dollar budget. One report said that the Mayor tried to secure a $16 million loan to cover the shortfall but failed because of their poor credit rating, partly because they talked about defaulting on debts. They also have unsustainable legacy costs.
The Mayor is being accused of bullying the Council for the sole purpose of raising taxes.
“If they’d gone with my budget, we wouldn’t be having this discussion,” Doherty said. “The taxes would have been raised. The bills all would have been paid because we would have had a dedicated revenue stream.”
Mr. Doherty proposed a 78% property-tax increase over three years [THAT’S RIGHT, 78%], and an increase in garbage-collection fees. The city council rejected that plan and wanted the mayor to consider other revenue sources. Robert McGoff Jr., a city council member who has been supportive of the mayor, said the council has yet to offer any firm alternatives to the mayor’s budget proposals. [WSJ]
As of Monday, Scranton had $133,000 in cash on hand, but owed $3.4 million in various vendor bills, including health insurance.
Many stores in the downtown are shuttered because of the declining economy. The people don’t want, and most can’t afford, higher property taxes, certainly not 78% higher. It’s a dire situation, made worse by the inability of the Council and the Mayor to work out a solution.
If they are wondering where they might shave off some money, they might want to look at the plethora of entitlement programs for Scranton-Wilkes-Barre which are way too expensive.
Scranton has one of the oldest HUD programs and it is way too costly – it’s time for a redo.
Since HUD is underperforming, why doesn’t the city take some of those funds, eliminate the HUD middle men, and distribute the funds directly through their city officials?
Scranton just lost a lawsuit that forces them to provide education for three years beyond age 21 if the student has an IEP (everyone who has the slightest handicap or is a trouble maker now has an IEP). The city can’t afford it but the lawyers won the suit.
Scranton spends enormous sums for Title I and Head Start respectively. Head Start is not very effective. As an educator I can tell you Title I isn’t used effectively. People send their taxes to the government and then the government metes out the funds through these Title I grants with a whole lot of overpaid middle men profiting from the indirect and unsupervised distribution of funds.
Waste disposal and management is implemented according to unrealistic mandates.
Highway planning is out of control.
Millions are spent on firefighters (terror training) grants and now the city can’t pay the firefighters – ironic, isn’t it? A lot of that training is a joke if it is anything like the training in NYC.
There is no evidence the Mayor plans to cut anything. His website claims that Scranton is the Progressive city. Click her for the costs involved in being Pennsylvania’s Progressive City. So much for being the Progressive City.
Give me the Scranton budget for a month and I’ll have that deficit taken care of and the city employees will be back making a living wage. Click this link – The Brookings Institute – and check out the welfare and entitlement programs the area supported as of 2008 with federal funds. Federal funding or not, it’s time to re-examine the expenditures.
The more entitlements they add, the less money the city has, the fewer people they have to support the entitlements, and the more they will need these entitlements to be expanded. They no longer extend a helping hand to the needy, they support the middle class with entitlements. That does not foster growth and employment.
The Mayor has been in office since 2002 and has supposedly tried to “break” the unions, not by negotiating, but by engaging in legal violations and losing the consequent lawsuits, at least that is according to the unions and their supporters. Community members have voted the Mayor back into office in part because they are resentful about the union salaries and benefits.
Legacy costs are cited as a cause of many problems. A state law says cities must follow contract terms set by an arbitrator regardless of the city’s financial situation. The state Supreme Court ruled in the fall that Scranton had to pay $30 million in additional labor costs granted through arbitration. Negotiations between the city and the three unions in June cut that increase roughly $15 million. [WSJ]
Rick Schuettler, deputy executive director of the Pennsylvania League of Cities, said he believes the state needs to cap the amount of labor cost increases granted through arbitration. “We’re not suggesting that anybody’s collective bargaining rights be taken away,” he said, “but they need to have reasonable caps on them.”
Scranton’s government leadership mirrors that of the federal government. Read this and weep America. We are all Scranton. We have entered the death spiral.