A Scranton, Pa., taxpayer group is asking a county court to force the distressed city to immediately comply with an order to cap its taxes by state law.

Judge James Gibbons' final ruling in the Lackawanna County Court of Common Pleas could cost Scranton up to $50 million just as the city is looking to exit from state oversight.

“We do not believe oral arguments are necessary and respectfully request the court to handle this matter on an expedited schedule,” the group’s attorney, John McGovern, wrote Gibbons.

A sign welcomes visitors to Scranton, Pennsylvania, U.S., on Sunday, Oct. 12, 2008.
Millions of dollars are at stake in a lawsuit against Scranton over taxes. Bloomberg News

The city intends to object in a formal reply. Kevin Conaboy is representing the city in the case.

It is the latest episode in a year-long back and forth between the taxpayer group, led by municipal analyst and former independent mayoral candidate Gary St. Fleur, and Scranton, the 76,000-population county seat in northeast Pennsylvania.

The group last March sued the city, saying it exceeded a cap under Pennsylvania’s Act 511, a local tax enabling act. The city has argued that its home-rule charter exempts it from taxation limits.

In late December, the Commonwealth Court of Pennsylvania rejected Scranton’s appeal and returned the case to the county court, where Gibbons will make a final determination.

“I agree that the case should be dealt with immediately since it has been proven that the city has been stealing tax money from the good people of Scranton,” said St. Fleur, who favors the city filing for bankruptcy.

Scranton raised the levy from $52 to $156 for every person working within the city limits who earns at least $15,600.

City officials have called the tax increases essential for their recovery under the state-sponsored Act 47 for distressed communities, to which Scranton has belonged since 1992.

Scranton, whose bonds are junk, received a general obligation upgrade from S&P Global Ratings in August to BB-plus from BB. The new rating is one level below investment grade.

The taxpayer group consists of St. Fleur, Nicholas Gettel, Casey Durkin, Damian Biancerelli, Rich Johnson, Ethan Green, Angela Gilgallon and Michele McGovern. All are residents and all subject to the local tax.

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Paul Burton

Paul Burton

Paul Burton is the Northeast Regional Editor for The Bond Buyer and the author of the book "Tales from the Newsrooms." He is a sought-after public speaker and has appeared on radio and TV shows, including former CBS News White House correspondent Sharyl Attkisson’s public-affairs program, “Full Measure.”