The residents of Walker County, Ala., spoke at the polls yesterday narrowly failing to approve a one-cent sales tax needed to fund debt relief for the county and additional county services, WBRC.com reported. Officials in the county pleaded with voters ahead of the election to pass the increase saying that the county could be forced to file bankruptcy without the additional funding. That one-cent sales tax was projected to raise about $7 million per year that would have went toward debt payments, public safety, volunteer fire and rescue, and roads. County commissioner Jeff Burrough said that the tax structure in Walker County is outdated and hasn't kept up with the financial needs of the county. The county will now be forced to look for other ways to pay off $27 million worth of debt.
For years the U.S. Virgin Islands funded essential public services with help from Wall Street. Investors lined up to purchase its triple-tax-exempt bonds, a form of debt free from municipal, state and federal taxes, but now the borrowing window has slammed shut, Reuters reported yesterday. Trouble in neighboring Puerto Rico, which recently filed for a form of bankruptcy after a string of debt defaults, has investors worried that the U.S. Virgin Islands might be next. With just over 100,000 inhabitants, the protectorate now owes north of $2 billion to bondholders and creditors. That’s the biggest per capita debt load of any U.S. territory or state — more than $19,000 for every man, woman and child scattered across the island chain of St. Croix, St. Thomas and St. John. The territory is on the hook for billions more in unfunded pension and healthcare obligations. Ratings agencies have downgraded the islands’ credit ratings deep into junk territory. With the U.S. Virgin Islands shut out of the credit markets after a failed January bond issue, officials are scrambling to stabilize its finances after years of taking on debt to plug yawning budget holes.
An arbitration panel has awarded a city union pay raises totaling 6.25 percent, even as Hartford's financial problems continue to mount, the Hartford (Conn.) Courant reported yesterday. The Hartford Municipal Employees Association received the raises retroactively as part of a contract that ran from July 2013 to June 2017. The group is now negotiating a new agreement with the city for future years. Former city leaders offered HMEA a 5 percent raise over the course of the contract, while the union sought a 7.5 percent pay increase. Arbitrators ultimately awarded the group 6.25 percent. The group made concessions in other areas — health care and pension contributions rose, and members agreed to eliminate a practice known as "runout," which allowed employees to remain on the books for weeks or months after they departed their city positions. Runout let workers stay on the payroll for the duration of their unused sick and vacation time. During that period, they were able to continue collecting paychecks and benefiting from the city's health insurance plan. The city abolished the practice for nonunion employees in 2013.
The city’s $63 million budget surplus has become a bone of contention between municipal retirees and city officials, The Detroit News reported yesterday. Retirees insist that they deserve a share of the surplus in order to make up for hits they took to their pensions and other benefits during the city’s bankruptcy three years ago. The city’s CFO says that’s not possible because the extra money needs to be set aside to cover future pension obligations. While the two sides debate how those extra funds should be spent, retirees like struggle to make ends meet. Thousands of retirees saw their pensions cut by 4.5 percent in 2014 after the city filed for bankruptcy. The city slashed $7.8 billion from payments to its retired workers and escaped $4.3 billion in retiree health care costs. The city’s administration said there’s no way to restore pensions because Detroit must set aside funds each year for the Retiree Protection Fund to address a looming pension shortfall in 2024.
