The economy continues to be challenging as city governments, households, and
businesses have been dealing with interest rate volatility, rapidly rising housing costs,
workforce shifts, climate change concerns, and global political unrest that have led to
continued uncertainty and budgetary pressures. Household budgets are tight as wages are
not keeping pace with inflation in many sectors.
The City of Scranton has navigated the challenges of the past few years well, managing
budget surpluses in 2020, 2021, 2022, and 2023 and is tracking well, year to date against
the 2024 Budget. We have managed expenditures and mitigated rising costs as best we
can, including driving down healthcare costs while maintaining excellent employee
health plans, and paring back budget line items to only fund what is necessary. We have
incrementally increased pay rates for our more than 500 employees to attract and retain
talent and continue to innovate around our services and programs. There is still a
significant gap in our salaries versus similar Pennsylvania cities, however, we have made
progress and continue to seek competitive salaries for current and future staff. City
employees need to pay their mortgages too.
The City continues to monitor and manage its fiscal health recovery. In 2024, the City
refunded its outstanding General Obligation Notes, Series of 2016. Through this
refunding the City realized a net debt service savings of $2,195,558. Also in 2024, the
City created a Capital Reserve Fund to provide better accounting and transparency of
City capital expenditures.
One of our administration’s proudest moments occurred in March 2024 when the credit
rating agency Standard & Poor’s (S&P) raised Scranton’s BBB- bond rating two notches
to BBB+, with a positive outlook. The upgrade to BBB+ reflects the City’s continued
improvement in its liquidity position and balanced financial operations without reliance
of federal stimulus. The positive outlook reflects the potential that S&P could raise the
rating in the next two years if the City’s cash reserves and liquidity position continue to
improve.
While our cash position is stable, we have a long road ahead to true fiscal health given
legacy obligations for pensions, healthcare, and other benefits. We continue to fight an
uphill battle against decreasing real estate assessments; until 2026 when the Lackawanna1County Reassessment becomes a reality, we must continue to adjust for declines in the
City’s real estate tax revenue stream.
We continue to carefully manage our finances with constant acknowledgement that these
are the hard-earned dollars of our residents and businesses, dollars meant to be spent on
the safety, health, and well-being of our taxpayers and their families. We believe that
modest annual incremental tax increases to meet the costs of running our services is more
manageable for our residents than, for example, hiking tax rates only when necessary,
after years of keeping rates flat for political purposes.
Last modified: October 31, 2024
