Famous fictional Scrantonian Michael Scott tried out an impromptu oral declaration of bankruptcy when he faced financial difficulties in Season Four of “The Office” (NBC-TV), but it turned out all he needed to do was to rein in his household’s spending.
Unfortunately for taxpayers and elected officials in the real Scranton, they have far less ability to stop making expenditures they can’t afford than the charmingly incompetent regional branch manager for the Dunder Mifflin paper company.
That’s because Pennsylvania labor laws make it virtually impossible for the state government or any locality to reform the way they compensate unionized public employees without union bosses’ acquiescence — and union bosses have proven themselves remarkably reluctant to agree to changes even when a city or county is dying.
A reporter for the Los Angeles Times recently visited Scranton and found that many residents are strongly in favor of bankruptcy as the only viable way to break the spiral of rising taxes and wasteful government expenditures. (See the link below for the whole story.)
The growing popularity of the Scranton “bankruptcy movement” constitutes, of course, a stern rebuke to state elected officials who have established and perpetuated a labor-law system that empowers government union bosses to hold a financially desperate city hostage:
“The silent majority would like to see bankruptcy,” said Bob “Ozzie” Quinn, president of the Scranton and Lackawanna County Taxpayers Assn. “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.
In its 2014 budget, the city raised property taxes and trash fees nearly 60% and tripled rental registration fees. The city’s school district, which faced a $4-million deficit, raised taxes 2.4%.
The City Council, which in 2012 passed a 5% amusement tax on live entertainment, is now discussing a 10% drink tax. The city’s parking authority is in receivership, and it recently privatized its parking meters: The company in charge upped rates and extended meter hours to 6 p.m., which bar owner Mert Gavin says has motivated workers to skip happy hour and head home to the suburbs straight after work.
“I am one of the last two bars that’s still downtown. Tink’s is gone. Whistle’s is gone, Banshee’s is gone, Molly Brannigan’s is gone,” said Gavin, who runs Mert’s. “Do they expect I’m going to bail the city of Scranton out myself?”
The taxes are especially egregious to some because so many of the city’s residents are elderly and living on fixed incomes. The median household income in Scranton is $37,000, and nearly one-fifth of residents live below the poverty line.
Evann Xanthis, 59, earns $7,000 a year in disability benefits, her only income; she had a spinal injury that has limited her ability to work. She owes the city $12,880 in back taxes on the house she’s owned since 1988. She’s thinking of taking out a home equity loan just so she can pay her taxes.
“I go to sleep every night worried about the taxes,” said Xanthis, a mother of two. “I just don’t know what I’m going to do.” . . .
In Scranton, fiscal woes are not new. It has been a “distressed city” under Pennsylvania law for more than 20 years, and was famously and repeatedly put down in NBC’s comedy “The Office.”
Though Scranton has not faced decline on the scale of Detroit, signs of economic distress aren’t hard to find. Some homes sit empty after residents lost them to foreclosure. Others are sagging, their paint peeling, their stairs chipped.
Shuttered stores dot the Mall at Steamtown, once a vaunted redevelopment project, and the mall lost its biggest store, the Bon-Ton, this month. In 2012, the city temporarily paid its employees minimum wage when its coffers ran low.
The city’s financial problems were accelerated by a 2011 Pennsylvania Supreme Court decision that found that the city owed its police and firefighters unions back pay — about $21 million. The settlement money became due in 2013, but the city bickered over how to come up with the funds for so long that Moody’s warned in November that Scranton faced the threat of default.
“It’s been nonstop. They raised the water fees, the electric, the gas,” said Richard Laytos, a Scranton native who moved back to the city to retire in 1997 after 44 years in New Jersey.
He figured he couldn’t retire in New Jersey on a fixed income, and was paying $8,000 a year in property taxes. He now pays about $4,700 a year in county, city and education taxes, double what he paid when he first returned to Scranton.
He can pay the taxes, for now, but says that many other residents with less generous pensions are struggling. That’s one of the reasons he wrote to the local newspaper in November: “The coffers are empty. Savings are gone. Our city is dying. File bankruptcy.”