On October 6, Scranton, PA resident Gary St. Fleur formally announced the submission of a ballot initiative aimed at forcing the city to file for Chapter 9 bankruptcy. The ballot, which is the first of its kind, is a response to years of debt, an ever-growing deficit, and the recent leasing and sale of public assets.
“My reasoning is simple,” St. Fleur said before city council. ”I believe that all of the activities and actions that this government has set forth has indicated a pattern of fiscal irresponsibility. The fact is that Chapter 9 bankruptcy exists for municipalities who cannot service their debts, such as Scranton.”
The city’s long-standing financial problems can be traced back to 1992 when the Pennsylvania Economy League (PEL), under a state law implemented to help municipalities in financial trouble, began advising city counsel members and the mayor on various techniques to regain financial stability. Increased taxation on the already burdened residents was the first and now the most common technique.
As is usually the case with a tax increase, it has only served to stop those living below the poverty line from rising out of the economic oppression, and been a major deterrent for local business owners to set up shop in Scranton.
“You are hurting the people of Scranton,” said one citizen addressing the counsel on the recent sale of a municipal parking garage for one dollar.
Scranton has certainly lost many citizens over the past few decades of due to the municipality’s financial issues. According to the US Census, Scranton’s peak population was near 150,000; today less than half remain. Nearly ten percent of that population loss has occurred since the most recent bout of taxes began in 1992.
“This is the very reason why you need Chapter 9 Bankruptcy; if you can’t service your debt, if you can’t pay for your debt, if you don’t have any tax revenue and 30% of your population is on a fixed income,” St. Fleur in an interview after the city counsel meeting. “What plan, what viable strategy do you ever foresee occurring that can get the city out of this debt? It’s like kicking a can down the road.”
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