It goes without saying that many elected officials are not elected because of their financial acumen. If they were, we would not have the sort of crisis we are now facing nationwide with pensions. To make this point clearer, I would like to submit a case study of the City of Scranton and how it is obsessed with ruining the cities financials.


The City has been beholding to unions for some time. Union influences spread far and wide in this area and affects everything from the local government to judicial elections. The city of Scranton decided to offer lavish retirement to package to city employees that it could not afford. But that’s not all: here is a list of the sort of shenanigans that tax payer dollars pay for in Scranton:

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  • Despite having no money, the city spends half of its budget on salaries(here)
  • The fire fighters pension is only 17 percent funded, the non-uniformed fund is 23 percent funded and the police fund is at 29 percent.(here)
  • Over a dozen non-uniformed employees have received double pension payments (here)
  • Despite being underfunded the police pension fees were increased last year(here)
  • In Scranton, 38% of the people are on social security, 20% subsist below the poverty line, and 7% are unemployed. This means roughly 2/3rds, or 66%, of the entire City is in poverty. Yet, they still raise fees and taxes (here)
  • 50% of the police officers and 56% of the firemen in Scranton are currently on disability and receiving disability payments. The highest rate in the entire state of Pennsylvania!(here)
  • Being on disability in Scranton does not disbar these people from getting jobs elsewhere. One source is quoted saying “There are actually some people in Scranton, some retired police officers who are now working as prison guards. “ (here)
  • Residents are terrified and afraid to speak out for fear of the repercussions. Corruption runs deep.(here)
  • The recent budget that is attempted to be passed raises taxes and gives the Mayor along with other members of his administration raises! (here)
  • The average wage of a police officer in Scranton is 74,210 while 2/3rds of the city lives in poverty.(here)

What this shows is a story of malfeasance, corruption, nepotism and fraud. The current Mayor, Bill Courtight, plan is to raise taxes and fees which even an elementary accountant would tell you will not get Scranton out of this mess. Why?


If we look into the numbers a very frightening and disconcerting story begins to unravel. On November 2013, the wires were abuzz with talk of Moody’s recent announcement that Scranton was on the cusp of bankruptcy (here) They based this on the fact that Scranton had no money and was seeking 20 million dollars to pay its bills. According to Moody’s:

Scranton had intended to complete a $28 million debt issuance by mid-2013 and use the proceeds to pay an arbitration award and fund increases to the city’s 2013 pension contribution. However, in July [the underwriter negotiating the loan with Amalgamated] opted to delay … citing Scranton’s lack of progress in implementing its … recovery plan.

Scranton will begin fiscal 2014 with effectively a zero cash balance, creating significant operational strain until the bulk of its property tax revenue comes in March.
Moody’s was primarily concerned with finding out if Scranton can remain as a going concern. A look at the balance sheet and recent budget will tell you if Scranton is even a viable economic entity as it stands now.


scranton balance sheet
As of 2014


As you can see from the Scranton balance sheet, the current long term liabilities of the city are 232, 256, 613.640 million with an M. The current budget has an illusory figure of 130 million dollars based on Goldilocks accounting measures where potential loans are assumed to be received as revenue- despite have a less than junk status.

Scranton budget

Now, when we put these today statements together, we it spells out is a horrific picture. The balance sheet does not account for a 27 million dollar judgment against the city of Scranton when the unions sued-yes that’s right the unions sued!- the city and won. Couple that with the unfunded pension which stands at about 100 million dollars and you have a city where the population is dwindling(75,806), 2/3rds of the residents are in poverty, businesses are closing, but somehow must pay for 400 million dollars in debt! If we take the viable residents that are capable of paying back this debt, meaning they may possibly have the disposal income to lessen this burden, we only come up with 25,268 residents who are not impoverished. They would each need to come up with $15, 830 each


The reason why these local governments are able to get away with this is because so few are paying attention. It should be shouted on the roof tops what’s going on in Scranton. It should be considered offensive to the highest degree. Our cities should not be used a personal piggy bank for a secret faction to use at their leisure. Furthermore, when corporations commit fraud people go to jail, how is it that local governments can be clearly fraudulent and not held accountable? Someone please bring the tar and feathers…


Gary St. Fleur
[email protected]

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