Scranton Wants To Declare Bankruptcy

Map of Pennsylvania highlighting Lackawanna County

Map of Pennsylvania highlighting Lackawanna County (Photo credit: Wikipedia)

SCRANTON, PA — When Detroit filed for bankruptcy, hundreds of residents took to the streets to protest what they saw as a drastic approach to fixing the city’s budget problems.

But in this hilly town of 76,000 in northeastern Pennsylvania, residents have a different view of Chapter 9: They want the city to declare bankruptcy. And soon.

“The silent majority would like to see bankruptcy,” said Bob “Ozzie” Quinn, president of the Scranton and Lackawanna County Taxpayers Association. “Basically, it’s down to a point where people cannot afford to pay the taxes and are moving out of town.”

Faced with a $20 million deficit, Scranton had to do some tricky maneuvering to balance its budget and avoid defaulting on loans. Most of this maneuvering has involved increasing taxes and fees paid by the people who still live in the town, which has seen its population drop by half since the 1930s.

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Scranton Mayor Proposes 56 Percent Property Tax Increase; 69 Percent Garbage Fee Hike

Map of Pennsylvania highlighting Lackawanna County

Map of Pennsylvania highlighting Lackawanna County (Photo credit: Wikipedia)

With wary banks watching Scranton‘s finances closely, Mayor Chris Doherty today proposed a $130.5 million budget for 2014 that would dramatically raise real estate taxes, the garbage collection fee and parking-meter rates and penalties.

Read the budget HERE

A real estate tax increase of 56.7 percent would be one of the largest, if not the largest, tax hikes ever in the city. A trash collection fee increase of 68.5 percent – from the current $178 a year to $300 a year – would be the largest garbage fee hike ever.

The large spikes are all necessary to close a $20 million operating deficit for 2014 and restore the city’s creditworthiness with lenders, Mr. Doherty said.

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Scranton’s Parking-Garage Rates Won’t Decrease; Chamber Seeks Parking Input

As Scranton leaders are considering increasing hours, days and rates of downtown parking meters, some business owners want to see the city’s parking-garage rates reduced.

However, the court-appointed receiver in charge of the garages and their rates, Mike Washo, said he has no plans to lower garage rates, because a reduction would drain revenue from the authority and further burden city taxpayers to fund any shortfall that may arise from reduced rates.

“We don’t believe that any reduction in parking garage rates at this time will generate additional customers to justify the reduction in rates,” Mr. Washo said. “At the end of the day, we’ll end up with less revenue.”

In recent weeks, a plan by Scranton’s mayor and city council to hire a private firm, Standard Parking, to manage the city’s on-street parking meters has raised numerous questions and concerns among downtown businesses, residents and council members.  Citing Standard Parking’s estimates, council members think the city can net an additional $1.8 million a year by switching parking-meter management from the inactive Scranton Parking Authority to Standard Parking.  Under this plan, which was tabled Feb. 7 by council, meter hours would extend from 8 a.m. to 6 p.m. Monday through Friday to 8 a.m. to 8 p.m. Monday through Saturday.  Ten-hour meters also would increase from $1 an hour to $1.50 an hour.

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PEL: Scranton Needs More Than 12% Tax Hike

Map of Pennsylvania highlighting Lackawanna County

Map of Pennsylvania highlighting Lackawanna County (Photo credit: Wikipedia)

Scranton‘s state-designated recovery coordinator, Pennsylvania Economy League, has told city officials they need to raise property taxes next year higher than the 12 percent that the city budget for 2013 proposes. Exactly how much higher was not stated.

In a letter received Thursday, PEL Executive Director Gerald Cross notes that the city has not dedicated a tax millage toward paying for the city’s second unfunded debt package approved by a court this year, of $9.75 million. In that case, Judge Peter O’Brien, a senior visiting judge from Monroe County, on Oct. 31 ordered that a tax millage be dedicated to paying back this unfunded debt.

It was the same arrangement the city sought and received in January, when a different judge, Senior Monroe County Judge Jerome Cheslock, approved the city’s first unfunded debt, of $9.85 million, and ordered that this amount be paid back with a dedicated tax millage over 10 years.

The first unfunded debt package translated into the 12 percent tax hike in the proposed budget for next year, city officials have said.

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Scranton City Council To Introduce Commuter Tax

Scranton City Council will be voting Thursday to introduce a commuter tax, according to a public notice issued today.

A commuter tax – a 1 percent earned-income tax on nonresidents of Scranton who work in the city – is one of the city’s key alternatives to property tax hikes under its revised Act 47 recovery plan adopted Aug. 23.

A 1 percent commuter tax is expected to raise $2.5 million next year and $4 million in 2014 and 2015, city officials have said.

The council ordinance would propose to increase the non-resident earned-income tax from the current 1 percent to 2 percent, while maintaining the earned-income tax of 2.4 percent on city residents, the public notice states.

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Scranton City Council Sets Public Hearing On Recovery Plan

English: Downtown , USA

English: Downtown , USA (Photo credit: Wikipedia)

Scranton City Council on Thursday tabled a revised recovery plan but set a public hearing on the proposal for next week and a vote for adoption for the following week.

Council President Janet Evans said efforts are under way to further revise the consensus recovery plan.  It was reached July 27 by her and Mayor Chris Doherty after months of stalemate, but raised concerns from the city’s Act 47 recovery coordinator, Pennsylvania Economy League, that much of its revenue was speculative.

“There are adjustments being made to it, and it’s ongoing,” Mrs. Evans said.  “I’m hoping that all changes are complete prior to the public hearing.”

At the Aug. 2 meeting, Mrs. Evans said the mayor/council consensus plan was a “take it-or-leave it” proposition for PEL.  Asked after the meeting if she had backed away from that stance, Mrs. Evans said no.

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