As Scranton teetered on the brink of bankruptcy, its mayor Chris Doherty made news earlier this month by paying city workers minimum wage rather than their full salaries, citing empty coffers. Scranton’s police, fire, and public workers unions are now asking a court to hold the mayor in contempt for defying a court order to pay the workers in full.Yet if Doherty’s claims are correct, the city simply doesn’t have enough money to pay its workers—and may not anytime soon. The Times-Tribune reports:
Mr. Doherty said, “If I had the money, I’d pay them (employees). Again, it’s the council’s budget” that has not provided enough funding to pay all of the city’s bills. . . .It remains to be seen whether the city would have enough cash on hand to make a full payroll on the next payday of July 20, the mayor said.As of Monday, the city had $133,000 in cash, but owed $3.4 million in various vendor bills, one of which was health insurance, said city Business Administrator Ryan McGowan.That was more than either Thursday and Friday, when the city’s bottom lines were $5,000 and $83,000, respectively, he said. The daily amount fluctuates depending on how various tax revenues come in and bills are paid, he said.
Negotiations continue to try to find some way out of the financial crisis, but it appears that workers are headed for, at best, a second round of minimum wage paychecks. Scranton’s problems reflect the combination of long term economic decline, a failure to re-imagine and reform the way government works, the usual failed urban redevelopment boondoggles and shortsighted behavior by municipal employees and politicians who pander to them. In other words, Scranton is a fairly typical if unusually unlucky American city. As time goes by, we can expect more cities to come to this pass with all the human suffering and unfairness that comes out of this kind of crisis.The only way out is a much more sweeping program of national and local reform than is yet on the table; the longer we wait the harder this will be. In the meantime, read more Via Meadia on municipal bankruptcy and the death of blue.