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SCOTT SIMON, HOST:

This is WEEKEND EDITION from NPR News. I'm Scott Simon. Scranton, Pennsylvania sent out paychecks to its employees Friday, like it does every two weeks. But this time the checks were much smaller than usual. The mayor has reduced everyone's pay, including his own, to the state's minimum wage, $7.25 an hour. Scranton's mayor says that his city has just run out of money. NPR's Jeff Brady joins us from Philadelphia where he's been following the story. Jeff, thanks for being with us, and explain what's going on?

JEFF BRADY, BYLINE: Well, Scranton has had financial troubles for a couple of decades now. The town has been losing population pretty much since the end of World War II. But in recent months, the budget problems became more serious, as the mayor and the city council, they fought over to how to balance the budget. Mayor Chris Doherty wants to rise some taxes to fill a nearly $17 million budget gap. The city council wants to take another approach and borrow money in the meantime. I talked to Mayor Doherty over the phone, and he predictably blames the city council for the current situation.

MAYOR CHRIS DOHERTY: I'm trying to do the best I can with the limited amount of funds that I have. You know, I want the employees to get paid. Our people work hard - our police and fire. I just don't have enough money. And I can't print it in the basement.

BRADY: The city says it owes employees about a million dollars. But after giving workers their checks based on the minimum wage, it had only about $5,000 left. And I understand more money has coming into city accounts since then but it's still not enough to pay all the wages that are due to Scranton's public employees.

SIMON: What was the reaction of city workers, including, obviously, police and firefighters who are expected to be on their important jobs today but maybe can't pay their own bills?

BRADY: Yeah. They did have some warning this was coming - just a few days though. There are about 400 employees in Scranton affected by this. I talked with the president of the local firefighters union. His name is John Judge. He also works as a firefighter for the city. He says checks were supposed to come out Thursday but they were a day late. His typical check is about $1,500 every two weeks after deductions. And yesterday, his check was less than $600 before deductions. So, Judge says he has some savings but the reduced pay is going to be hard on his family this summer.

JOHN JUDGE: Don't know how I'm going to pay bills at home. I may be able to stave it off for a little while, but I'm going to have to forgo, you know, kids aren't going to be able to do certain activities this summer. And maybe we're not going to be able to go on vacation.

BRADY: The firefighters union, along with the police and public works union have taken the city to court. A Lackawanna County judge issued an injunction, essentially agreeing with the unions that the city was breaking the law. But Mayor Doherty says he doesn't have a choice. And despite the injunction, he had the city send out the paychecks based on minimum wage.

SIMON: So, the unions have already won their case in court and yet the mayor says, as he said to you, I just can't print money in the basement. What happens now?

BRADY: Well, the unions say they plan to be back in court first thing Monday morning. They're going to ask the judge to hold the mayor in contempt. And I think it's worth noting here that there is absolutely no love lost between Mayor Chris Doherty and the public employee unions. They've tussled with each other in the past. There was an extended legal battle over pay that went all the way up to the State Supreme Court. So, both sides are bringing some baggage and some hard feelings to the table. But with 400 city workers receiving a third of the pay they typically get, that sort of thing can't go on forever.

SIMON: And I imagine the mayor's position is if you're down to just a few thousand dollars in the bank, to borrow the money to pay the employees would put you in a deficit situation.

BRADY: It would put them in a deficit. And borrowing is part of the plan here. The problem is that without a clear path forward for money coming into the city, what bank is going to come along and lend you that money? And that's what the mayor's position is now. This dispute, he says, needs to be straightened out with the city council before they can actually go out and convince a bank to lend them money.

SIMON: NPR's Jeff Brady joining us from Philadelphia, speaking about the situation in Scranton. Thanks so much.

BRADY: Thank you.

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