Editorial: Will the next Scranton be here?
You can see Scranton, Pa. from here.
Counties and cities in the Hudson Valley haven't reached Scranton's position yet, teetering on the verge of bankruptcy and all but out of cash, but despite their recent efforts places like Yonkers and Rockland County are heading toward it. Which means they're moving in the wrong direction.
Scranton Mayor Chris Doherty, overseeing a municipality that was down to its last $5,000 in cash recently, decided every city employee, himself included, would be paid $7.25 an hour until the city got back on its financial feet. It wasn't a pay cut exactly, because Doherty promised the back pay that accrued would go to workers someday. Several of the unions that represent the city's workers sought an injunction against him, demanding he cut the checks employees are contractually entitled to. The unions won in court. But last Friday, Doherty issued the short paychecks anyway.
The city is broke. The banks won't lend to it, and the city council refused to raise taxes enough -- Doherty asked for a 78 percent hike -- to either refill the coffers or convince the banks to open their purse strings. The unions won't give back enough to make the numbers work.
Doherty is likely angling to put the city into bankruptcy by proving, in a very public and dramatic fashion, that Scranton can't pay its bills. Once he gets to bankruptcy court, his contracts with the unions are essentially void.
Yonkers, once home to some of the first saw mills in the nation and the likes of Otis Elevator, until it departed in 1983, isn't as broke as Scranton. And it's hard to imagine any leader in this city calling for minimum wage municipal workers.
But New York State's fourth largest city is flirting with its own financial ruin as its expected revenues over the next four years just don't add up to expenses. Its projected budget gap for 2013 was pegged at $89 million and could balloon to $210 million by 2016.
Higher taxes, fewer services, layoffs and perhaps even a return of a state control board will be part of the city's fiscal conversation for years to come.
Take that all into account, and Scranton begins to shimmer in the distance.
Across the Hudson River, Rockland County is still wrestling with its own distress as two agencies have lowered its bond ratings to just above junk status, and county lawmakers in recent months have had to lay off more than 100 people, cut services, sell buildings, add surcharges and pass along costs like elections bills to the county's five towns.
All this after a 30 percent tax hike -- and it's still not enough to plug its multiyear $80 million budget deficit.
Neither of these entities has the excuses Scranton does, nor those of Harrisburg or other bankrupt municipalities like Stockton and San Bernardino in California. In many ways, Yonkers and Rockland, like Nassau and Suffolk counties on Long Island, are largely powered by the world's greatest economic engine, New York City, and they've brought their fate upon themselves.
So they shouldn't end up where these other, utterly broke governments have. But if local governments aren't going to wind up there, they are going to have to find new paths to follow -- and get off the road to Scranton.