Courtesy of Mish.
It is truly pathetic watching politicians flop like fish out of water trying to prevent something that was clearly inevitable long ago.
Please consider Moody’s warns of bankruptcy in Scranton as city faces $20 million budget gap.
Moody’s warned investors that Scranton could be facing the threat of default or bankruptcy thanks to a $20 million budget gap for the fiscal year that begins Jan. 1. Scranton has more than $195 million in outstanding debt, according to Moody’s.
A similar crisis hit the city in July 2012, which lead to Mayor Chris Doherty cutting all city workers’ pay to minimum wage for several weeks, a move that made national headlines.
“A second liquidity crisis could have more severe effects, including additional defaults,” Moody’s warned.
To generate revenue necessary to address its debt, Scranton has considered taxing commuters and alcoholic drinks, though neither has been approved by the city council. The Pennsylvania Economy League, which is overseeing Scranton’s Act 47 recovery plan, warned last month the city would have to raise taxes to avoid a default at the beginning of the 2014 fiscal year.
Scranton also faces more than $100 million in unfunded pension debt, on top of the $195 million in other debt owed.
Adding to Scranton’s financial woes is the need to borrow another $28 million to pay a court-mandated settlement with the city’s police and firefighter unions.
Tax Hike is Pure Idiocy
The numbers say everything that needs to be said. It is absolutely impossible for Scranton to did out of this hole, I do not care how much taxes are raised.
All tax hikes can do is harm more working class citizens for the benefit of undeserving public union workers.
Liberal Fantasyland
Whatever judge awarded the police and fire workers $28 million is an idiot or a genius, depending on his or her intent….
