The City of Scranton has navigated the challenges of the past few years well, managing budget
surpluses in 2020, 2021, 2022, 2023 and 2025. The City experienced a deficit of $3.3 million in
2024 due to the failure to timely receive federal and state grant reimbursements for capital
project expenses the City incurred in 2024. The 2026 operating budget through October is
tracking well against the 2026 adopted budget. Fiscal year 2026 also marks the second year that
the City has operated with a capital spending plan budget making it much easier for elected
officials and taxpayers to properly identify and track City capital expenses.
The economy continues to be challenging as municipal governments, households, and businesses
deal with economic insecurity, 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 struggle to keep pace with inflation in many
sectors.
In spite of these challenges, the City continues to manage expenditures and mitigate rising costs
as best we can, including staying below the market trends in healthcare cost increases while
maintaining excellent employee health plans, and paring back budget line items to only fund
what is necessary. The 2027 operating budget includes reasonable pay increases for our more
than 500 employees to retain and attract 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.
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The City continues to monitor and manage its fiscal health. While our current cash position is
stable, the City still has a long road ahead to true fiscal health given legacy obligations for
pensions, healthcare cost increases, and other benefits. In addition, the City continues to fight an
uphill battle against decreasing real estate assessments. However, with the implementation of the
new property reassessments in 2026, the City’s real estate tax burden is now distributed fairly
among property owners by the adjustment of assessed property values reflecting current market
values.
We will maintain our commitment to prudent financial management of City finances in fiscal
year 2027 with a 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. While the 2027 operating budget does not include any tax increases,
we believe that modest annual incremental tax increases to meet the costs of running our services
is more manageable for our residents.
Last modified: November 9, 2026
