Financial forecast looks bleak as debt study released

SCRANTON, LACKAWANNA COUNTY (WBRE/WYOU) — In Lackawanna County, the financial forecast is looking bleak. On Thursday, the financial consultants the commissioners hired a few months back unveiled their initial findings on how to keep the county afloat through the end of the year.

The path to financial recovery for Lackawanna County is just beginning. PFM Consulting shared their first part of the study focusing on immediate actions needed to stabilize finances through 2024.

“The county has a spending problem, that’s what it is, that’s what it comes down to,” said Lackawanna County Commissioner Chris Chermak.

Facing a projected $11,300,000 shortfall by the end of 2024, Lackawanna County could see significant financial changes.

“I think that the county’s going to have to take a look back at the federal stimulus money, and make a hard decision and say we really wanted to use it for ‘x’ but instead I need to use it for ‘y’. Expenditure reduction has to be part of the story because it’s the only side of the budget you can control,” PFM Group Consulting Managing Director Gordon Mann explained.

Besides the spending cuts which include a hiring freeze and reallocating federal funds, PFM strongly suggests a property tax hike to bridge the cash gap.

“I think the county is going to have to borrow money and that converts to a real estate tax because the money to pay for that borrowing isn’t going to naturally materialize overnight,” Mann said.

“It’s unfortunate but it’s going to be necessary to get us out of this, this hole I mean for the last 15 years if you look back, the last really significant property tax increase was in 2013,” Lackawanna County Commissioner Bill Gaughan said.

This is part of a broader strategy to ensure the county has enough funds to operate through 2024 and beyond.

“We’re going to continue to do everything we can in mind to make this place truly home and truly special, some of the recommendations today that PFM made were, are unfortunate but unfortunately, it’s the position we’re currently in,” said Lackawanna County Commissioner Matt McGloin.

Long-term plans from PFM include a detailed five-year strategy yet to be presented, aiming to tackle the structural deficit that has been building over the years.

“The concept is this: if I can see a wall three miles down the road, I’ve got much better options to avoid it, so let’s identify that wall now so that we can make small adjust means now to avoid having to make much sharper adjustments later on,” Mann added.

How much that tax increase is going to be is unclear at this time as the commissioners still need to finish up the 2025 budget. PFM plans to release the five-year plan soon after.

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