Tag archive for Scranton

Unreformed public pensions keep eroding Pennsylvania’s credit

On September 25th, Standard & Poor’s became the last among the Big Three credit-rating agencies to downgrade Pennsylvania’s general obligation (GO) debt. The state was taken down a notch to AA- with a stable outlook – still in safe “investment-grade” territory.  In explaining the downgrade, …

Fiscal gimmickry 101

In yesterday’s post, I alluded to the fact that there may be some dispute as to whether, under Pennsylvania law, a city’s budget really is balanced. That’s because Pennsylvania has no rules against cities counting debt issuance, “interfund transfers” and reimbursements as revenue.  This leads …

Scranton: still determined to tax its way out of distress

In December 2012, Scranton, PA petitioned Lackawanna County Court for a non-resident earned income tax.  The court rejected the city’s request.  In September 2013, Scranton petitioned Lackawanna County Court for a non-resident earned income tax.  The court rejected the city’s request.
After the second failure, the …

Has Scranton finally hit rock bottom?

Scranton, PA’s long-running fiscal crisis may now be coming to a head now that a court has struck down its bid to levy a commuter tax. But to hear the City Solicitor Jason Shrive tell it, the Electric City has become the municipal equivalent of …

Is Pennsylvania building a “Too Big To Fail” pension system?

Based on recent comments by the state Auditor General, it seems that Pennsylvania’s approach to its escalating pension crisis is to embrace a “Too Big To Fail” structure – by consolidating municipal pension funds into larger systems and then back-stopping the underfunded systems with state …

Is it time for Scranton to go bankrupt?

A 2011 Pennsylvania Supreme Court decision which forced the struggling city of Scranton to adhere to a $21 million arbitration ruling in favor of employees is now also helping drain the city’s deeply indebted pension system. The pension system, with $150 million in unfunded liabilities, has just learned that it must come up with somewhere between $7 million and $10.5 million in additional dollars because retirees are entitled to some of the raises ordered by the court. All of this is money the insolvent city, which famously cut worker pay to the minimum wage two years ago, doesn’t have..

Arrogant, reckless and insane: How Scranton’s unions are fleecing the taxpayer

On December 11, Scranton’s public servants turned on the city.  After threatening to sell city hall or even the city’s fire trucks, the city’s police and fire unions filed a lawsuit requesting that the Court impose “special taxation” earmarked for repayment of an outstanding $21,000,000 …

An introduction to Act 47, Pennsylvania’s “roach motel” for distressed cities

Pennsylvania is home to 26 officially “distressed” municipalities (and Philadelphia). Nearly three quarters of a million people – approximately 6% of the state’s population – reside in these cities, towns and boroughs. Altogether, three of the six largest cities in Pennsylvania are struggling: Scranton, Reading and Pittsburgh. These are not good stats….

Scranton: Unions, arbitration equal big tax increase

Pennsylvania_Paper_&_Supply_Company_towerIf you’re living in a city where “municipal unions control city government” and binding arbitration allows a judge to impose a settlement on you that you can’t afford, what can you expect? A 40 percent to 50 percent increase in your property taxes, it seems, if you happen to live in Scranton, Pa., birthplace of VP Joe Biden.

Late last week Moody’s warned that Scranton could face default thanks to a cash crunch similar to the one it faced in 2012, when the city missed bond payments and reduced pay of workers temporarily to minimum wage…

Want to empower cities? Reform binding arbitration.

Local governments dominated domestic policymaking in 19th century America. In general, government was quite small, but most of the services that were provided, such as public education and road-building, were the responsibility of city and town officials.
The Brookings Institution and the political theorist Benjamin Barber have recently advocated …