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Thu Jul 19, 2012, 07:24 PM

Scranton: When Your City Needs to Go Bankrupt

A lot of cities are in financial trouble these days, but the case of Scranton, Pennsylvania, stands out for its unusual degree of bickering as it descends into the fiscal abyss. Mayor Chris Doherty has cut nearly every city employee’s pay -- including his own -- to minimum wage ($7.25 an hour).

The mayor is acting in defiance of a court order mandating that he pay the employees in full. The International Association of firefighters ran a full page ad in the Scranton Times this past weekend, depicting the mayor in a dunce cap for his actions.

Mayor Doherty has a pretty good counterargument: The city literally doesn’t have the money to pay its employees. Two weeks ago, the city’s bank balance dwindled to just $5,000. Now, it’s about $130,000, enough to cover one day’s municipal expenses and not enough to meet payroll. Thanks to a bridge loan from the state, Scranton may soon be able to pay employees in full, but not forever -- the bridge loan only provides enough money to get the city into August.

http://www.bloomberg.com/news/2012-07-19/scranton-when-your-city-needs-to-go-bankrupt.html

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Reply Scranton: When Your City Needs to Go Bankrupt (Original post)
MindMover Jul 2012 OP
southernyankeebelle Jul 2012 #1
HooptieWagon Jul 2012 #2
Squinch Jul 2012 #3

Response to MindMover (Original post)

Thu Jul 19, 2012, 07:28 PM

1. We are going to see alot of small towns go down the drain.

 

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Response to MindMover (Original post)

Thu Jul 19, 2012, 07:29 PM

2. The state needs to allow the city to file for bankruptcy

so a judge can restructure loans. And it sounds like there should be an investigation and shakeup in the parking dept.

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Response to MindMover (Original post)

Thu Jul 19, 2012, 10:34 PM

3. The shortfall they're talking about amounts to $280 per person to close it.

This doesn't seem like it should be such a big deal. They also say the shortfall amounts to half the amount that the city currently collects in taxes. Which means that people are only paying $560 a head in city taxes. That's not a lot. Or am I missing something?

This seems like much ado about very very little. Is this just another way to show how the terrible unions are hastening the end of the world?

What am I missing here?

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