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Good news for Scranton Pennsylvania city employees that is they -- paid today.
But the city have to borrow six million dollars to come up payroll joining us now Steve -- got all all but shake down all of accountant municipal from.
Scranton gets -- six million the people get paid the cut the -- bat talon is technically in all but name bankrupt.
Right well they are insolvent and basically the reason they got the slowness because the state is backing them you know again we've talked about the war.
One of the differences between whether Citi -- from bankruptcy not as whether it's state is gonna Bakken in or not in California they're not backing their cities and letting go.
In Pennsylvania that they have just distressed -- programs.
You know -- -- insane thing of Harrisburg so foreign to you know but but -- haven't come up with a financial plan yet.
That really is gonna give them a sustainable budget over time OK he's the basic problem.
The pay for employees and the -- that they'd been promised our that that is essentially they're the basically their expenditures based on those contracts are way out of whack with their actual tax revenues now they've got a financial plan where they're talking about raising taxes the kind of taxes that they can't operate without the state approving them.
Including sales tax income taxes which is not what municipality usually do.
And that has -- -- At been approved yet but one way or other people's -- are gonna pay a book a much more money from taxes so the bar is six million dollars -- from the amalgamated right back -- the union bank right.
They're gonna pay that back in December want to -- they're doing a loan from the state in order to pay that actually -- doing after the state actually got a -- here on.
It's a spiral actually it was a mistake silverlight -- -- bail amount by.
What sort of telling them -- it's giving the money for fitness and if it's if this happens in all done.
A Pennsylvania towns and cities as I believe how could have happened and how -- -- are basically about twenty Pennsylvania however part of this just state and can't afford all these bailouts of towns and cities across the state -- the state can't do it.
-- absolutely right so.
And get what is back at -- -- -- well why -- not all the cities that are distress or in quite the shape.
That spread -- news and some of these cities the reason they claim they they put them into distressed program that allows them to do things like -- not have to be subjected to things like binding arbitration.
That helps to make things worse and so you know they're not I'm not every city is right on the precipice right now but if this fiscal downturn continues if we don't get an economic turnaround.
You're gonna see other states including California and Illinois what so many municipalities.
In trouble they can't help -- -- -- Steve mulling a -- back clears it up at -- yet we need growth right we didn't need growth please lord we love Stephen thank you very much indeed.
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