Scranton, Pa., officials, who last month temporarily sliced municipal employees’ pay to minimum wage to combat a cash crisis, have agreed on a recovery plan to pay back the workers. The plan relies in part on an eight-fold increase in payments in lieu of taxes from nonprofit groups, the Scranton Times-Tribune and Reuters report.
Revised from a May proposal that called for a 78 percent increase in property taxes, the new plan tentatively agreed upon Friday by Mayor Chris Doherty and city legislators reduces that hike to 33 percent.
Among the plans to make up the lost revenue are a commuter tax and significantly bigger voluntary contributions from tax-exempt organizations, a move sought by city council members. The proposal envisions annual payments from such groups rising from the current $300,000 to $2.4-million in 2015.
Mr. Doherty said Scranton aims to replicate successful efforts by Providence, R.I., officials to secure more money from that city’s universities and nonprofit hospitals to close budget gaps and pay for police, fire, and other services to the tax-exempt groups.