By Eric Boehm
November 11, 2013
By Eric Boehm | PA Independent
Scranton could be headed towards another fiscal crisis like the one that resulted in city workers having their pay cut to minimum wage in 2012, according to a major credit ratings agency.
In a weekly publication, Moody’s warned investors that Scranton could be facing the threat of default or bankruptcy thanks to a $20 million budget gap for the fiscal year that begins Jan. 1. The city is supposed to approve a new budget by Nov. 15, which would have to close that deficit to balance the budget.
Without a balanced budget, the ratings agency warned that two financial institutions could withdraw from scheduled debt financing for the beleaguered northeastern Pennsylvania city.
“A second liquidity crisis could have more severe effects, including additional defaults,” Moody’s warned.
Doherty is the current mayor of Scranton, but didn’t seek re-election this year and will step down from the post at the end of the year. City tax collector Bill Cortwright, a Democrat, was elected mayor Tuesday with 55 percent of the vote, beating Republican nominee Jim Mulligan.
Neither Doherty nor Cortwright returned calls Friday.