Scranton cuts public employee salary to minimum wage including police and fire

[KRonn]

Can't municipalities file bankruptcy? If it lacks money and can't pay bills, isn't that what it should be doing?

Maybe that's the next step, if these drastic measures don't work.

[CountDeMoney]

Can't municipalities file bankruptcy? If it lacks money and can't pay bills, isn't that what it should be doing?

Maybe that's the next step, if these drastic measures don't work.

It would be interesting to know how it came to this point in the first place, other than the blurb about the Mayor and the Council not seeing eye-to-eye.  This sort of municipal insolvency just doesn't happen overnight.

[KRonn]

Can't municipalities file bankruptcy? If it lacks money and can't pay bills, isn't that what it should be doing?

Maybe that's the next step, if these drastic measures don't work.

It would be interesting to know how it came to this point in the first place, other than the blurb about the Mayor and the Council not seeing eye-to-eye.  This sort of municipal insolvency just doesn't happen overnight.

I said something similar earlier. 
"Sad that it comes to such last minute, extreme measures. Too bad they could never have made some changes and reforms when times were good, so hopefully finances wouldn't have come to such a bad point to where they even consider this type of pay cut. "

Same kind of thing goes on in many places. In Massachusetts as they laid off teachers, police and fire officers I had to wonder what the powers to be should have done to lower costs before the crap hit the fan, so it didn't have to come to layoffs.

[DontSayBanana]

It would be interesting to know how it came to this point in the first place, other than the blurb about the Mayor and the Council not seeing eye-to-eye.  This sort of municipal insolvency just doesn't happen overnight.

What's interesting is that the town thinks cutting everyone's pay like that is an option before dissolving Scranton's incorporation.

[OttoVonBismarck]

These sort of things happen to towns sometimes, typically a large loan or bond issuance is involved somewhere. I'm not one to rile the Ide's and Seedy's of the world into a frenzy, but oftentimes JP Morgan or Goldman Sachs are actually the movers behind the deal. Almost all of these deals work out fine for the municipality, since local governments have taxing power they can usually meet bond or loan obligations so they are a somewhat safe investment. However sometimes a town's economy goes into the toilet so bad that there is no feasible way to raise taxes to keep up with the obligations. You basically come to a point where you would have to raise "town killing" (meaning it would force all the people to move) taxes or you start layoffs and etc.

Where it's all really heading is of course municipal bankruptcy and then the town goes into a form of receivership where the State bails it out and then comes in and manages the finances of the town until they can be trusted again. It sounds like in this case municipal bankruptcy is what is necessary, because if they are looking at a 78% property tax increase just to keep their heads above water I don't know that there are many viable options out there.

[CountDeMoney]

These sort of things happen to towns sometimes, typically a large loan or bond issuance is involved somewhere. I'm not one to rile the Ide's and Seedy's of the world into a frenzy, but oftentimes JP Morgan or Goldman Sachs are actually the movers behind the deal.

That's because they're sometimes the only ones that can pull it off.  The State of Pennsylvania, as a commonwealth, may have some real restrictions on what they can do and can't do when it comes to bailing out municipalities, I don't know.  I know that most states don't allow their municipalities to declare Chapter 9, so the Too Big To Fail or Go To Jail banks have to do the heavy lifting.

You basically come to a point where you would have to raise "town killing" (meaning it would force all the people to move) taxes or you start layoffs and etc.

Michigan's been looking at that problem for a while;  some towns simply have to go, and wind up needing to get rolled into a larger municipality.

[Habbaku]

Hell, not just some towns but even some counties should bite it.  Georgia lost two entire counties during the Great Depression due to financial issues (and now there's some push to remake them).  A town is nothing.

[Admiral Yi]

Can't municipalities file bankruptcy? If it lacks money and can't pay bills, isn't that what it should be doing?

Sure.  Stockton CA filed for bankruptcy not to long ago.

[Admiral Yi]

But invective aside, what I find interesting is something about unpaid bills?  Why are salaries, which as far as the city is concerned really just bills, deferred but not outside third parties?  Oh, right, because fuck workers, fuck unions, fuck decency, send your city into a death spiral of austerity, but don't dare fuck with institutional creditors who don't even fucking live there, because they're like fucking gods.  It's Germany and the EU, writ small.

Your Germany and EU jab misses its target by a mile.  Private holders of Greek debt took a 75% haircut.

[katmai]

Meh Scranton and Stockton are both better off being put out of their misery.

[Zoupa]

They'll be ok. I hear Schrute Farms is hiring.

[Josquius]

Wonder if they could work out some sort of deal whereby they agree the minimum wage is just a temporary thing whilst the city gets its shit somewhat in order- afterall its either a terrible job or no job.

[Admiral Yi]

Wonder if they could work out some sort of deal whereby they agree the minimum wage is just a temporary thing whilst the city gets its shit somewhat in order- afterall its either a terrible job or no job.

This is a great suggestion Squeeze.

[CountDeMoney]

They'll be ok. I hear Schrute Farms is hiring.

It took til page 2 for to get to this.  Disappointing.

[ulmont]

Georgia lost two entire counties during the Great Depression due to financial issues (and now there's some push to remake them).

I miss Campbell county.