Press Release
Scranton is seventh municipality to recover from distressed status under Wolf administration
Scranton, PA – Today, Department of Community and Economic Development (DCED) Secretary Dennis Davin announced that the city of Scranton’s status as a distressed municipality under Act 47 is terminated. Scranton is the 16th municipality to exit the program.
“This is a very special day in Scranton’s long and storied history,” said Sec. Davin. “It’s been three decades since Scranton was originally designated a financially distressed municipality under Act 47, and the Wolf administration recognizes the years of hard work and collaboration between the city’s community, their businesses, and partners for helping to achieve this momentous goal.”
In a ceremony at Lackawanna College, Sec. Davin signed a formal determination letter finding that termination of the city’s distressed status was appropriate under Section 255.1 of Act 47. The decision was made after a thorough review of the city’s audits, financial data, and the record from a public hearing held on November 16, 2021. Sec. Davin was joined by Mayor Paige Cognetti, City Council President Kyle Donahue, Pennsylvania Economy League Senior Research Fellow Gerald Cross, and other local and community leaders.
“We are grateful to all those past and present, who had a hand in putting us on a path to fiscal stability and enabled Scranton to finally shed the “distressed” label,” said Mayor Cognetti. “We know the path ahead will not always be easy, but we are working hard to secure the city’s financial health now and for future generations.”
The hearing officer’s report indicated Scranton’s financial condition and position has significantly improved during its time in Act 47. The hearing officer also acknowledged that the commitment of the Mayor, City Council, and staff has been admirable, and that the improved financial condition and outlook should allow the city to function independent of state oversight.
Scranton was designated as distressed under Act 47 on January 10, 1992. This determination was made after years of recurring deficits, ineffective financial management practices and unfavorable socio-economic and demographic trends.
The city’s recovery efforts were aided by a positive change in the dynamics between city council and mayoral administrations, which continue today through Mayor Cognetti’s administration. This has helped the city to prepare and follow realistic budgets and find ways to improve services while cutting costs. Additionally, city leaders authorized and shepherded a monetization of the sewer authority and used the funds to address pension shortfalls and pay off punitive loans.
“After 30 years, the City of Scranton is finally able to shed the label of being a financially distressed municipality” said Council President Kyle Donahue. “Moving forward, City Council is committed to working with the Cognetti administration to modernize city government while keeping both legacy and operating costs under control. We must continue to explore ways to improve city services without overburdening our taxpayers in order to continue moving Scranton into the 21st century.”
“After Act 47, Scranton has a bright future ahead of it,” said Cross. “The city’s leaders understand that there will always be difficult decisions to be made. I know that the strong character of the city’s leaders will enable them to make those decisions to benefit the city’s future.”
Scranton is the seventh municipality under the Wolf administration to recover from distressed status. Prior to Scranton, the City of Farrell, Mercer County, was the most recent community to recover, exiting Act 47 status on February 8, 2019. Plymouth, Luzerne County; Nanticoke, Luzerne County; Clairton, Allegheny County; Pittsburgh, Allegheny County; and Altoona, Blair County also exited from Act 47 under the Wolf administration.
The Municipalities Financial Recovery Act, Act 47 of 1987, was enacted to provide a broad-based program of fiscal management oversight, technical assistance, planning and financial aid to municipalities experiencing severe fiscal distress.
Author: Amaury Abreu
