SCRANTON, Pa. (AP) — An economic recovery plan proposed by leaders of the struggling city of Scranton contains too many speculative revenue sources, according to a state-appointed overseer.
The Pennsylvania Economy League said the plan submitted by the mayor and city council should be reworked because it relies too heavily on sales and commuter taxes and increased contributions from the city's nonprofits. A number of the proposed taxes would require court or legislative approval.
Council voted Thursday to move ahead with the plan anyway, hours after the economy league raised concerns, The Times-Tribune of Scranton (http://bit.ly/RgDsZ1) reported.
The city currently projects a $16.8 million budget deficit. Mayor Chris Doherty temporarily cut worker pay last month when it couldn't meet payroll.
As the overseer appointed under the state's Act 47 program for distressed municipalities, the economy league must approve of the recovery plan.
"I believe PEL has sentenced the city to bankruptcy," council President Janet Evans said.
PEL Executive Director Gerald Cross insists the agency isn't rejecting the plan so much as seeking refinements, such as listing alternatives should some of the revenue not come through.
"We question some of the numbers. We're asking for more clarification and further revisions," Cross said.
The proposed plan would boost real estate taxes by 33 percent over three years, far less than the 78 percent hike the mayor proposed in May.
According to Doherty, the city needs an updated recovery plan to show lenders as it seeks to borrow or refinance $17 million to end the year with a balanced budget.
Evans and other council members believe the league wants the city to impose significantly higher tax hikes.
"Those changes are not going to occur," Mrs. Evans said. "PEL can take it or leave it."
A vote on the plan is slated for Aug. 16.
A spokesman for the state Department of Community and Economic Development, which oversees the economy league, said the agency wants to work with city leaders to produce a viable, long-term plan.
"It's going to be a work in progress," spokesman Steve Kratz said.
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Information from: The Times-Tribune, http://thetimes-tribune.com/
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Information from: The Times-Tribune, http://thetimes-tribune.com/
