When the city of Scranton, Pa., found itself down to its last $5,000 in the bank last week, its Democratic mayor took a highly unusual step: he unilaterally cut the pay of city workers — including police officers, firefighters and even himself — to the minimum wage, just $7.25 an hour. Now the city’s unions are fighting for their promised pay in court.

“The teenagers who work at the ice cream stand not far from my house, they make $8.50 an hour — that’s a dollar and a quarter more than I now make,” said John J. Judge IV, a 10-year veteran firefighter who is the president of the Scranton local of the firefighters’ union.

But Scranton finds itself in a position that is unusual even in this era of widespread budget pain: it has nearly run out of cash and, so far, no one is willing to lend it more.