Scranton Public Employees Get a Raise
August 1, 2012 8:55 am
Scranton’s Mayor Chris Doherty announced Monday that Scranton public employees will be reimbursed for the minimum wage paychecks they brought home on July 6th — with six percent interest to boot. In accordance with the settlement, workers dropped their pending lawsuit in Lackawanna County, where a Judge had ordered a hearing to potentially hold the Mayor in Contempt. The unprecedented move, which reduced the wages of police, firefighters and other civil servants to that of the average fry cook, may have used the take-home pay of union members as a political bargaining chip in an ongoing tax battle.
The broke city is digging its way out of the woods thanks to a $2,000,000 no-interest loan from the State of Pennsylvania, coupled with a $250,000 grant. Doherty offered up a rather typical justification for the paycuts, stating: “The biggest killer is our pension and health-care costs.” While the city’s pension and healthcare obligations — comprising 47% of the 47 million compensation budget — are nothing to scoff at, the fight over property taxes in the city tells a different story.
Scranton was able to secure the $2 million loan by agreeing to raise its property taxes 33% over the next three years. The Wall Street Journal quotes Gregory Minchak, a National League of Cities spokesperson, on the city’s housing situation:
“Like other cities, it relies heavily on property taxes, which have been hurt by “the housing market not coming back. If property assessments are down, they’re in trouble.”
In an editorial for the Los Angeles Times, Harold Meyerson of the American Prospect told a similar story of workers, unions and pensions being scapegoated for city bankruptcies in California. He stated that San Bernadino and Stockton never recovered from the housing market. Like those cities, Scranton’s real estate market topped off just as the bubble was bursting. The difference in Pennsylvania is that declaring bankruptcy is highly discouraged — meaning the floundering mayor was forced to pass the pain on to workers.
From the WSJ piece: “Robert Stoltewicz, a 32-year-old firefighter with two children, received a $468 paycheck on July 6—some 70% below his usual pay for two weeks. ‘There’s no amount of frugality that could make that work,’ he said.”
Image from here