Tuesday, July 10, 2012
Goodbye Scranton, Hello Stockton
Mayor Chris Doherty wants an immediate tax hike of 29% and 78% over three years. In every sense of the word, Scranton has gone bust.
The city sent out paychecks to its employees Friday, like it does every two weeks, but this time the checks were much smaller than expected. Mayor Doherty had cut every one's pay - including his own - to the state's minimum wage: $7.25 an hour.
Imagine every one's surprise, when pay-day rolled around.
Doherty wants to raise taxes to fill a $16.8-million gap, but the city council wants to borrow more money, both sides are at odds with each other, leaving the poor folks of Scranton feeling royally screwed.
After paying workers Friday, the city had only about $5,000 left in the bank. More money flowed into city accounts that day, but it was still not enough to pay the $1 million the city still owes to its nearly 400 employees.
The firefighters' union, along with the police and public works unions, have taken the city to court. Lackawanna County Judge Michael Barrasse issued an injunction, essentially agreeing with the unions that the city was breaking the law, but Doherty says he doesn't have another choice. Despite the injunction, he had the city send out paychecks based on minimum wage.
The unions plan to be back in court first thing Monday morning to ask the judge to hold Doherty in contempt.
The Scranton Times-Tribune reported there's no way for the city to take out a loan because it is unable to show it is capable of paying it back. Scranton has become a sub-sub-prime borrower, that even a payday lender won't touch.
"I'm trying to do the best I can with the limited amount of funds that I have," Doherty said in an interview, "I want the employees to get paid. Our people work hard -- our police and fire -- I just don't have enough money, and I can't print it in the basement."
The unions see the mayor's pay slash as a bullying technique designed to force the city council to adopt his tax increases, but without money in the bank - it's a moot argument. Maybe Mitt Romney can help Scranton out with some of that cash he has stashed over-seas.
As far as the residents of Scranton go, who in their right mind is going to hang around after they hike taxes? It'll become like another Detroit complete with falling home values and zero public services. Just try to sell your home now. Good-luck with that Scranton.
Maybe if Scranton had not incorporated itself as a city, and become a bank holding corporation like Goldman-Sachs or J.P Morgan the cash and bonuses would still be flowing. You don't see anyone working at either of these making minimum wage do you?
Will Scranton become the next Stockton, CA?
During the last three years Stockton has seen it's share of dysfunction. With a $90 million in deficits after cutting police and fire-fighters, Stockton is still winning the race to the bottom. Residents are seeing rising crime rates, plummeting home values and an explosion in homelessness.
Since Stockton couldn't plunder employee pensions by law, they have eliminated heath benefits for all employees, including retirees. As of July 1, the bankruptcy plan approved by the City Council cuts contributions to current employee and retiree heath benefits and eliminates benefits for all employees with less than 10 years of city service. (How's that for a slap in the face?)