Is Scranton, Pennsylvania the Next Detroit? Public Union Pensions Driving Scranton to Bankruptcy

Scranton, Pennsylvania, home of Vice President Joe Biden, is bracing for bankruptcy because of overly generous union pension plans. According to Stephen Moore of Investor’s Business Daily Online:

The city also increased various fees, such as for garbage collection, by two-thirds. It’s becoming a tax hell. These taxpayer costs are skyrocketing, because the city’s auditors calculate that the police and fire pension fund will be completely depleted in three to five years….

Finances are so tight in Scranton that late last year the city auditor advised city agencies that “only in the event of an extreme emergency can a purchase be made”… So now, homeowners are getting squeezed on basic city services as they pay ever-escalating property taxes. Don’t be surprised as more leave Scranton, further depleting the tax base. And who would want to move there now?

The mayor of Scranton pleaded with unions to renegotiate the soaring pension costs. So far, unions have refused, making a Detroit-style bankruptcy the only and inevitable option.

Matt Austin is a lawyer based in the Columbus, Ohio office of Roetzel & Andress, LPA who limits his practice to representing employers dealing with labor, employment, and OSHA matters. You can call Matt at (614) 723-2010 or email him at maustin@ralaw.com.

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