Moody’s Investors Service said that Scranton, Pennsylvania’s sixth-most populous city, risks defaulting on its obligations if it can’t close a $20 million budget gap for next year, Bloomberg News reported on Friday. The city of about 76,000 residents faces a Nov. 15 deadline to introduce a spending plan for the year beginning Jan. 1. Without closing that shortfall, Janney Montgomery Scott and Amalgamated Bank will probably withdraw from planned financing that would give the municipality positive operating cash flow, Moody’s said in a report. Without that funding, “the resulting liquidity squeeze would leave the city with few options to meet its financial obligations, raising the threat of default or bankruptcy,” Michael D’Arcy, a Moody’s analyst, wrote.
