* City workers pay was slashed to minimum wage on July 6
* Officials cannot guarantee continued full payroll
* Pennsylvania offers money if city agrees on plan
By Hilary Russ
July 18 City workers in Scranton, Pennsylvania,
whose pay was slashed to minimum wage when the city was low on
cash, will get full pay this week, but how much they get in the
future is as uncertain as the city's ability to fill its
In the latest twist of a fiscal saga that has grabbed
attention around the world, Scranton officials said on Wednesday
that the city was able to make its full payroll of $1.1 million.
Checks to nearly 400 employees are due to go out on Friday.
Whether Scranton pays full or lower salaries will depend on
how much revenue the city collects, Scranton's business
administrator Ryan McGowan said.
"We're hoping the necessary revenue is coming in two weeks
that will allow us to meet a payroll" and other obligations, he
said in a telephone interview.
Scranton Mayor Christopher Doherty's decision to cut pay to
$7.25 an hour on July 6 put the spotlight on the Pennsylvania
city of 76,000. Scranton's city leaders cannot agree on how to
plug a $16.5 million budget hole for fiscal year 2012, which
ends on Dec. 31.
They are also at odds over a longer-term fiscal recovery
plan, which is required by the state because Scranton has been
operating under state supervision for financially distressed
municipalities since 1992.
The state is paying for a mediator and has offered an
additional $2.25 million in no-interest loans and grants, but
Scranton cannot claim the money unless Doherty and city council
members agree on a recovery plan by Aug. 1 and implement it
within the following two weeks.
City council members rejected a budget proposal by Doherty
to raise property tax rates by 78 percent over the next three
years. They favor $16.5 million in borrowing to fund operations
but have yet to secure lenders.
The city has struggled to pay its bills. After making
payroll of about $315,000 on July 6 at the reduced rate of
$7.25, Scranton had $5,000 left in the bank.
John Judge, president of the local firefighters union, said
the higher salaries would provide some relief, but he noted that
workers had not received money cut from the previous pay period
and were facing uncertainty over future paychecks.
"It's definitely going to be a help for the guys, but it
needs to be straightened out for good," he said.
When they received word that Doherty would cut wages,
Scranton's public employees' unions sued in local court. A judge
ordered Doherty not to cut their pay, but he did anyway, arguing
that he did not have the money for full wages.
Doherty, whose pay was also temporarily cut to minimum wage,
is due in court next Tuesday for a hearing on whether he could
be held in civil contempt. The unions also filed two federal
lawsuits after the salary reductions.