This is some bullshit

[Jamie_B]

Why do city workers always have to be the ones to pay for this shit? When you pay your police/firemen minimum wage you deserve what you get in response times.

[url="http://money.cnn.com/2012/07/11/news/economy/scranton-pennsylvania-finances/index.htm"]http://money.cnn.com/2012/07/11/news/economy/scranton-pennsylvania-finances/index.htm[/url]




[quote]
[b] Scranton cuts workers' pay to minimum wage[/b]


[color=#333333][font=Arial, helvetica, sans-serif][left]NEW YORK (CNNMoney) -- Scranton is broke.[/left][/font][/color]
[color=#333333][font=Arial, helvetica, sans-serif][left]Faced with a crippling cash flow problem and divided political leadership, one of Pennsylvania's largest cities distributed paychecks last week to city workers that cut wages to the legal minimum.[/left][/font][/color]

Scranton's 398 city workers -- including firefighters, police officers and the mayor himself -- were paid a reduced rate of $7.25 an hour.
The pay cut, which Mayor Chris Doherty has threatened since late June, was carried out even though a coalition of unions had been granted a court injunction that prohibited the mayor from slashing wage rates.
Doherty said he had no choice.
"We have enough money to pay minimum wage and, if more money comes in, we'll be happy to make those payments," the mayor told CNN affiliate WNEP-16.
The pay cuts are the latest, and perhaps most visible, consequence of what critics contend is years of financial mismanagement by the city's political leadership.
The current imbroglio has its roots in structural deficits and unpaid bills that have forced the city to rely on borrowing to stay afloat. But so far, banks haven't been willing to lend.
Lenders were spooked after the city council refused to make payments on debt issued by the city's parking authority. A flurry of resignations followed, and the bond trustee has been replaced.
But the short-term consequences of the dispute are now in full effect -- and the city is unable to borrow the money it needs to meet additional obligations.
One bank -- M&T ([url="http://money.cnn.com/quote/quote.html?symb=MTB&source=story_quote_link"]MTB[/url]) -- had been willing to offer financing, but negotiations collapsed after the city's political leaders were unable to agree on revisions to Scranton's so-called Recovery Plan.
The mayor's plan includes a 78% property tax increase and a hike on garbage fees. A majority of the city council is opposed to the plan, and the two factions remain at loggerheads.
[url="http://money.cnn.com/2012/06/05/news/economy/states-economic-growth/index.htm?iid=EL"](Related: State economic growth slowed in 2011)[/url]
Gary Lewis, a Scranton resident and consultant specializing in complex accounting for distressed assets, said the city is running out of options.
By his calculation, the city is facing a $20 million deficit next year, in addition to its pressing short-term funding needs. And the mayor's plan won't raise nearly enough money to cover the deficit.

"The city has a nasty habit of putting numbers in the budget that simply don't make sense," Lewis said.
Lewis, who writes a blog on the city's finances, estimated that Scranton had only $130,000 on hand at the start of the week. It also has $3.4 million in unpaid bills.
"This a cash flow problem and everybody involved is dragging their feet and making it a political issue," Lewis said.
City workers also blame the city's political infighting -- which appears to be endemic -- for Scranton's mounting fiscal problems.
"We're caught in the middle. They talk about a budget deficit, but that's not it," John Judge, the president of the International Association of Firefighters Local 60, said on Wednesday.
"[Mayor Doherty] is essentially being a baby. That's what it boils down to. He's been so used to having a council rubber-stamp the agenda and now that they're not, he wants to wreak havoc on everybody else," he said.
Lewis doesn't see many options for the city.
"I think the city is insolvent," he said. "We don't have enough money to meet our obligations. I don't know what we are going to do."
"It's just a bummer and it sucks to live here. This is my home."


[/quote]

[eva4ben-gal]

Sounds like it was a last resort. Better than laying people off

[Jamie_B]

Somehow I doubt it. Somehow I'd bet people just refuse to raise taxes to pay for it or cut non-essentials. Every time its the workers who have to pay and it's wrong.

[Go Skins]

Mods, feel free to create a new topic if needed:

http://money.cnn.com/2012/07/12/news/economy/california-bankruptcies/index.htm?iid=Lead

NEW YORK (CNNMoney) -- San Bernardino became the third California city to file for bankruptcy in the past few weeks ... but it won't be the last.
Many municipalities in the Golden State and around the nation are struggling to cover their costs as the economic malaise continues to hurt tax revenue streams, experts said. This will lead to more [url="http://money.cnn.com/2011/11/09/news/economy/jefferson_county_bankruptcy/index.htm?iid=EL"]municipal bankruptcies[/url], which have been rare until now.

"This is not the end. This is the beginning," said Peter Navarro, business professor at University of California, Irvine. "As cities see it can be done and is being done, it will give them the idea to do it."

The San Bernardino City Council voted Tuesday to file for Chapter 9 bankruptcy after the interim city manager issued a report that outlined its dire straits. Some $10 million to $16 million in annual revenue has evaporated in recent years as taxable sales dried up and property values plummeted.

Despite negotiating tens of millions of dollars in concessions and reducing its workforce by 20% over the past four years, San Bernardino was facing insolvency and would not have enough cash on hand to meet its obligations, according to the report.

"The city has reached a breaking point," the report said, noting the municipality of 211,000 residents was facing a $45 million shortfall.

[|Elflocko|]

North Las Vegas is getting ready to go over the ledge as well. They've shut down their jail, are cutting police and fire. I could see the entire city being absorbed into Las Vegas...

[big_dish]

I didnt read the article, but saw this on the news... if I recall correctly, this guy is a democrat right? Shit must be bad for that to happen... and towns, cities, counties, the entire country need to get their balance sheets, well, balanced.

I think teachers, cops, firefighters etc should be the last people to ever (if ever) have to take pay cuts. However, if you flat out dont have the money to pay them, do you just cut them bounce-able checks?

They'll get their pay, in this intance because of the judgement (or, I hope they do) but this is so extreme.

[big_dish]

Just went back and read the CNN article. I find it interesting (and obvious) that CNN didnt state his political party- they would have if he was republican.

[Jamie_B]

[img]http://24.media.tumblr.com/tumblr_m5jgz0gWIj1qeg3qeo1_500.png[/img]

[sois]

Those city planners need to get their SIM city skills up

[Vol_Bengal]

There is something skewed when the city is looking at a 78% property tax increase to offset the lack of ability to continue to borrow to pay the bills. And, that 78% still wouldn't cover everything - they listed other avenues to generate revenue.

I think cutting the working employees is a bad way to do it. But, somewhere between increasing taxes / revenue streams and decreasing expenses there is a sweet spot that doesn't require continually borrowing to pay the bills.


It funny this article got posted - kind of a mirror image to our national government's position on deficit spending. If the flow of borrowed cash ever stops we'll be in the same boat... as we sit right now.