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Distressed Scranton Proposes 29% Budget Hike

Scranton, Pa., though its status is distressed, proposed a 29% increase in its proposed budget for fiscal 2013.

The City Council on Thursday introduced Mayor Chris Doherty's $110 million spending plan that calls for increases in several taxes and assumes court approval of a 1% commuter tax.

A Lackawanna County's Court of Common Pleas three-judge panel is expected to rule on Scranton's request for the commuter tax on Dec. 10. Scranton is the seat of Lackawanna County.

The city over the past year has struggled to access the capital markets, notably in June when the City Council let the Parking Authority default on a $1 million bond payment. Mayor Chris Doherty in early July paid city workers the federal minimum wage during a cash crunch.

"The 2013 budget calls [for] an aggressive approach to current revenues," Doherty said in his budget report. It includes a 12% increase in residential property taxes. He and council finance chairman Frank Joyce attributed the increase in expenditures to increased new-money borrowing and refinancing necessary to satisfy the state Supreme Court's $17 million arbitration award to fire and police unions.

Scranton's $25 million of intended borrowing for 2013 includes $14 million in tax-anticipation notes.

A message seeking comment was left with Doherty.

Thursday's City Council vote to introduce the budget passed in a 3-to-2 vote, with council members Frank Joyce and Jack Loscombe joining President Janet Evans in the affirmative. Pat Rogan and Robert McGoff voted no. The latter two objected to raises ranging from 19% to 33% for six employees, including business manager Ryan McGowan and City Council solicitor Boyd Hughes.

The council is expected to give the budget a second reading next Thursday and consider adopting it on Dec. 13.

Gary Lewis, a private-sector consultant who lives downtown, questions some revenue provisions in the budget. "I think we have a whole bunch of iffy items. I still see a deficit of $20 million to $22 million," said Lewis, who maintains that the city would be better off filing for Chapter 9 bankruptcy protection.

Scranton is in the state-sponsored Act 47 program for distressed communities. It approved a revised recovery plan in August.

Also Thursday, neighboring communities opposed to the commuter-tax proposal filed petitions with the Lackawanna court. Mayfield Mayor Alexander Chelik, representing the Lackawanna County Association of Boroughs and the nascent group Scranton Taxing Our People, and Larissa Lawelski of Throop, who commutes to Scranton, filed separate actions, according to the Times-Tribune.

Judges Terrence Nealon, Robert Mazzoni and Harold Thompson, the latter from Pike County, will hear arguments on the commuter tax proposal on Dec. 10, with a split vote possible.

Nealon is said to be leaning toward granting Scranton the tax, while Mazzoni is seen as opposing it. "Thompson could be the wild card," said one local observer.

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