Can Power Be Restored in the Electric City? A Case Study of Scranton, Pennsylvania

45 Pages Posted: 26 Oct 2016 Last revised: 21 Sep 2018

See all articles by Eileen Norcross

Eileen Norcross

George Mason University - Mercatus Center

Adam Millsap

Florida State University - Department of Economics; George Mason University - Mercatus Center

Date Written: October 25, 2016

Abstract

Once a robust producer of coal, iron, and steel, Scranton, Pennsylvania, is perilously close to financial insolvency. A 75-year population decline has eroded its tax base, and city officials have been unable to control costs — a combination that threatens to bankrupt the city. Scranton was classified as a distressed municipality under Pennsylvania Act 47 in 1992, yet nearly 25 years later its problems remain.

This situation stems from decades of increased government spending in the face of a declining population, a shrinking economy, and an eroding tax base. A new study for the Mercatus Center at George Mason University thoroughly reviews the relevant economic indicators and fiscal policies to show how the city fell so far. It analyzes the economic, fiscal, and political factors that contributed to Scranton’s decline and that have prevented it from recovering. It is a study in economic and fiscal forensics that provides lessons for other municipalities. We conclude by offering several recommendations to improve Scranton’s finances and economic outlook.

Keywords: Public Pensions, Regional Population, Municipality, Local Public Economy

JEL Classification: H75, R23, R51

Suggested Citation

Norcross, Eileen and Millsap, Adam, Can Power Be Restored in the Electric City? A Case Study of Scranton, Pennsylvania (October 25, 2016). Mercatus Research. Available at SSRN: https://ssrn.com/abstract=2858983

Eileen Norcross

George Mason University - Mercatus Center ( email )

3434 Washington Blvd., 4th Floor
Arlington, VA 22201
United States
703-993-4930 (Phone)

HOME PAGE: http://https://www.mercatus.org/eileen-norcross

Adam Millsap (Contact Author)

Florida State University - Department of Economics ( email )

288 Bellamy Building
Tallahassee, FL 30306-2180
United States

George Mason University - Mercatus Center ( email )

3434 Washington Blvd., 4th Floor
Arlington, VA 22201
United States

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