SCRANTON — Scranton’s financial woes may be one step closer to being solved.
The mayor and council, after meeting Friday, have come up with a recovery plan proposal to help fill the city’s $16 million budget gap.
The recovery plan agreed upon by Mayor Chris Doherty and members of Scranton city council is currently being reviewed by the state Department of Community and Economic Development.
While not set in stone just yet, the proposal could help the city get more than $2 million in loans and grants, which could then possibly lead to financing from other sources.
After weeks of bitter back and forth, Mayor Doherty and city council members agreed on a recovery plan proposal.
“We`ve sent it down to the state, DCED and the Pennsylvania Economy League. They`re going to review it and I think it`s a really good step. I have to thank council for their cooperation and we`re hopeful that this will be the first of many steps that will get us through this process,” said Scranton Mayor Chris Doherty.
The recovery proposal comes after a lack of funds earlier this month forced the mayor to issue paychecks for minimum wage to Scranton firefighters, police and D.P.W. workers.
Mayor Doherty did not reveal specifics of the recovery plan, but council president Janet Evans told Newswatch 16 that it includes the elimination of the proposed garbage fee increase and a tax increase of approximately 30 percent over three years.
The mayor had proposed a 78 percent tax increase.
“The goal is to get through and not only for this year, but really for the next three to four years and bring stability. That`s why we had negotiated ahead with the police and fire so we have contracts now to take us out to 2017 and I think we`re on the right track. These steps that we`ve had to make have brought things to a head. In the end, you have to make some tough decisions, but they’re the right decisions because we’re elected to take care of the people of our city and that’s what we’re doing,” added Doherty.
The mayor and council had to agree on a recovery plan by August 1 and approve it by the 15th to get a $2 million loan from the state, which can help fund payroll and could open the doors to financing from other sources.
“If it goes well then, the state will then give us $2.25 million in loans and grants which will get us through our cash crunch. That’s our biggest challenge right now, that we’ve paid almost eight months of bills, yet we have a $16 million hole because in the budget, it’s borrowed. It’s borrowed money that we have not received. So you really have a cash crunch and the state is trying to help us through that crunch, to the point of when we get the loans from the banks, we’ll be able to pay all our bills,” added Doherty.
Taxpayer Marie Schumacher said she will wait to see.
“Well I was happy to see there was an agreement, but I have trouble believing the increases are adequate enough to cover the expenses and I would like to see where the additional revenue is going to come from,” said Marie Schumacher of Scranton.
Taxpayers could have that opportunity. If the state approves the recovery plan, council will put it on the agenda.
Council president Janet Evans said she wants to hold a public hearing, and if the city adopts the recovery plan, it could get financing through local banks to help with the $16 million budget gap.