Scranton, Pennsylvania Fighting Bankruptcy Foolishly

By:  Bob Adelmann
01/16/2014
       
Scranton, Pennsylvania Fighting Bankruptcy Foolishly

Economic ignorance and union influence will force Scranton, Pennsylvania, into Chapter 9 bankruptcy. 

When Moody’s Investors Service said back in November that Scranton, Pennsylvania, had run out of options except for bankruptcy, Scrantonians began to think that was a pretty good idea. The city council just raised property taxes and trash pickup fees by nearly 60 percent, tripled rental registration fees, and upped public school taxes. It’s currently discussing how else they can milk the unhappy taxpayers to close the $20 million shortfall in its 2014 budget, including a 10-percent “drink” tax on local bars. Economics 101 is kicking in, and Mert Gavin, the owner of Mert’s Piano Barcomplained:

I am one of the last two bars that’s still downtown. Tink’s is gone. Whistle’s gone. Banshee’s is gone. Molly Brannigan’s is gone.

Do they expect I’m going to bail the city of Scranton out all by myself?

Richard Laytos, a Scranton native, wrote to the local paper: "The coffers are empty. Savings are gone. Our city is dying. File bankruptcy!" 

Scranton, a city of 76,000 in northeastern Pennsylvania, has suffered economically for years, following the decline in the coal industry in favor of natural gas, a series of mining disasters, and hurricanes, which essentially erased much of the city’s economic base. The city has been on life support since 1992 when, under a state law designed to help cities like Scranton get back on their feet, a group called the Pennsylvania Economy League (PEL) began advising the mayor and the city council on remedies. Most of those remedies have been directed toward the hapless residents in the form of more taxes and fees, despite the fact that many of them are on fixed incomes, with a third living below the poverty level.

The most recent crisis in the summer of 2012 resulted in the mayor and city employees having their salaries cut back to minimum wage until the unions sued. At the time, the union-owned Amalgamated Bank offered to bail out the city using TRANS (tax and revenue anticipation notes) financing to provide the city with enough money to pay most of its current vendors. Amalgamated bailed the city out again last year but is now making any further loans contingent upon the city coming up with a balanced budget.

The city’s balance sheet is in simply awful shape. 

Click here to read the entire article.

The JBS Weekly Member Update offers activism tips, new educational tools, upcoming events, and JBS perspective. Every Monday this e-newsletter will keep you informed on current action projects and offer insight into news events you won't hear from the mainstream media.
JBS Facebook JBS Twitter JBS YouTube JBS RSS Feed