Pa. dangles crisis aid to Scranton

Posted: July 14, 2012

SCRANTON - State officials on Thursday advanced $2.25 million in incentives for fiscally struggling Scranton on condition that the mayor and City Council settle their differences and implement a financial recovery plan by mid-August.

The package would provide a no-interest loan of $2 million and a $250,000 grant to offset operating expenses if city leaders agree on a recovery plan by Aug. 1 and adopt implementing ordinances by Aug. 15. The state also would provide an outside mediator to help the two sides seek a compromise.

The Department of Community and Economic Development outlined the proposal in a letter to Mayor Christopher Doherty and Council President Janet Evans.

"The administration hopes that the offer of financial assistance to the city will provide some relief to your fiscal distress and enable the city to continue to provide vital and necessary services to the citizens of Scranton," wrote department Secretary C. Alan Walker.

Scranton faces a $16.8 million deficit while the administration and the council have been deadlocked over the city's $85 million budget.

Last week, Doherty defied a court order and cut the pay of about 400 city workers to the federal minimum wage of $7.25 per hour, prompting public employee unions to file legal challenges in county and federal courts.

The mayor told the Scranton Times-Tribune that the state's offer was a positive development. "I'm happy the state has stepped up and given us incentives [to approve a recovery plan] and offered their services for mediation," Doherty said.

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