WASHINGTON/CHICAGO (Reuters) – New Jersey, which revealed a massive budget shortfall this week, is far from alone in feeling the pinch of lower income tax revenues in the key month of April, a Reuters analysis shows.
Personal income tax collections plunged last month from a year earlier in 27 of 32 states for which Reuters was able to collect data. That’s most of the 43 states that levy income taxes, and drops were as high as 50 percent.
CHICAGO (Reuters) – An Illinois judge on Wednesday suspended the state’s new pension reform law until lawsuits brought by unions, retirees and others challenging the constitutionality of the overhaul of the retirement system are resolved.
“This law is going no place until there is a final resolution on the merits (of the lawsuits),” said Don Craven, an attorney who filed a lawsuit against the law on behalf of the Illinois State Employees Association Retirees.
WASHINGTON/CHICAGO (Reuters) – A top U.S. Federal Reserve official on Thursday called on regulators to revamp a variety of new bank rules, including the way capital minimums are set for big firms and exempting mid-sized banks from some rules.
Fed Governor Daniel Tarullo, the Fed’s point person on financial regulation, said a “rationalization” of some rules would reduce costs for banks but still achieve the goals of the 2010 Dodd-Frank Wall Street oversight law.
By Karen Pierog
(Reuters) – A committee created by a U.S. bankruptcy court to represent Detroit’s retired workers said on Friday it reached an agreement in principle with the city over pensions and healthcare.
The agreement, subject to documentation, would permit the committee to support Detroit’s plan to adjust $18 billion of debt and exit the biggest municipal bankruptcy in U.S. history, according to a statement issued by Dentons, the committee’s law firm.
(Reuters) – The board of Detroit’s General Retirement System on Wednesday approved economic terms of a settlement with the city that include cuts to pension benefits, putting in place another key component of Detroit’s effort to exit bankruptcy by October.
The city also has reached a tentative pact with the city’s other pension fund, the Detroit Police and Fire Retirement System, whose board is expected to vote later this week. Together, the two pension funds represent some 23,000 active members and retirees.
By Karen Pierog
(Reuters) – Detroit reached its first deal with a retired workers group on Tuesday over pension and healthcare benefits and was close to a deal with its two pension funds, giving a major boost to the city’s plan to exit bankruptcy in October.
Momentum for the city’s plan to adjust its $18 billion debt burden was building after Detroit last week won court approval for a crucial settlement over interest rate swaps and reached an agreement with bond insurance companies over the treatment of voter-approved general obligation bonds.
NEW YORK, April 10 (Reuters) – Kevyn Orr, Detroit’s
emergency manager, said he has lined up support from enough
creditors of the bankrupt city to force concessions from others,
but doing so would risk the loss of more than $800 million in
funding from the state of Michigan and philanthropic
A deal announced Wednesday with bond insurance companies,
along with a previous deal with two investment banks, could give
Orr authority under Chapter 9 of the U.S. municipal bankruptcy
code to force other creditors to accept payment terms. But a
so-called cramdown would violate a pre-condition of Orr’s “grand
bargain” with the state and foundations, which have pledged $816
million to ease pension cuts for retired city workers.
By Karen Pierog
(Reuters) – Detroit on Monday said it reached an agreement with two investment banks to end costly interest rate swaps, a move that could give Detroit access to revenue from casino taxes and give it leverage in efforts to win court approval for the city’s plan to restructure its debt.
The deal to terminate the swaps, which were used to hedge interest rate risk on some Detroit pension debt, would cost the bankrupt city just $85 million. That is a steep drop from two previous deals that carried price tags of $165 million and around $230 million, respectively and were rejected by U.S. bankruptcy Judge Steven Rhodes as being too expensive for the broke city.
By Karen Pierog
(Reuters) – Detroit faces a long legal fight over its valuable art collection and other key matters in its historic bankruptcy case that make it imperative to push back the start of a trial on the city’s debt adjustment plan, a bond insurer argued on Friday.
In a filing in U.S. Bankruptcy Court, Syncora Guarantee Inc warned that lawsuits will be filed over the Detroit Institute of Arts’ collection, which the city is not selling at this point to help pay its $18 billion in debt.
CHICAGO, Feb 27 (Reuters) – Standard & Poor’s Ratings
Services posed the question on Thursday that has been lingering
in the minds of many in Chicago: Will significant budget
pressures put the city on the same path that led Detroit into
The answer, contained in a report by the credit rating
agency, is no.
“We believe that Chicago’s growing economy and taxing
flexibility provide it with the resources to avoid a fate
similar to Detroit’s should it capitalize on this flexibility
and remain on course,” the report concluded.