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The city of Scranton, Pa., sent out paychecks to its employees Friday, like it does every two weeks. But this time the checks were much smaller than usual. Mayor Chris Doherty has reduced everyone's pay — including his own — to the state's minimum wage: $7.25 an hour.
I heard a judge ruled against the city HOWEVER the paychecks have already been "cut" and the city only has around 80,000 dollars left in its bank account.
They can't get anyone to provide financing so they are pretty much bankrupt. They are probably going to file soon and stop paying creditors. I expect this to continue. Sales tax revenue will continue to be depressed, vacant homes not paying property tax, citizens struggling and lacking the capacity to pay increased tax.
This stuff is no joke. These cities "fattened up" during good times and added a lot of overhead with the feeling of "we can afford it" without considering what might happen during an inevitable downturn in the economy.
I think public sector employees are in for a rude awakening. Those fat pensions you were promised will not materialize. Cities and States are running huge pension deficits. They planned on a steady 8% return on investment however the Federal reserve, in an effort to "stimulate the economy" have pushed down yields to 2 or 3%. There are only two ways to fix it. 1) Raise taxes on citizens, the majority of which do not receive pensions from THEIR jobs and are struggling financially themselves. (in other words they are not likely to agree) 2) Cut or reduce pension payments to retirees and current workers.
I guess the city could send out checks and have them bounce. What can you do when there is no money? Sounds like something should have happened way before this though. They should have seen this coming from a mile away.
The city can't possibly keep up with paying minimum wage either. Only option is bankruptcy. When many cities, counties and states start filing such, maybe the feds will take our problems seriously.
Illinois is heading in this direction. I am a county employee & will be lucky to receive my modest pension. I have to work 33 & 1/2 years to get it. There is no paid health care or cost of living raises. The polititians set themselves up for fat pensions, of well over 100k a year with free health care after retirement. I would rather be paying into social security but I wasn't given a choice. There are many of us who would like the county to refund our contributions that we have put in, & opt out of the pension program. This is what I want to do, but it isn't allowed. They take $200 every pay period out of my check, plus taxes. I would be better off paying into the social cseurity system & that's what I want to do. At least I would qualify for social security disability if I ever needed it. I don't have that protection in the pension system.
The polititions voted themselves raises, while the rest of the population has been suffering, unemployed, with no health insurance. GREED. People are leaving Illinois in droves, & I would like to leave, the problem is, there are no jobs anywhere! So here I am, stuck in Illinois.
I agree. I can't believe the council is against raising taxes.
That would suck for those public employees. Get you wage cut to minimum and have your taxes jacked up.
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