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A key Alabama legislative panel yesterday passed a bill allowing bankrupt Jefferson County to revive a local jobs tax but with changes that would reduce county collections and may delay full approval by state lawmakers and the governor, Reuters reported yesterday. An earlier version of the bill was approved last week by the State Senate and promised $60 million of annual revenue to cash-strapped Jefferson County, whose leaders argue that the jobs tax is vital to working out an exit plan from its $4.27 billion bankruptcy. An amendment tacked onto the bill yesterday could derail reauthorization of the tax, which was killed last year by a state court, according to Jefferson County Manager Tony Petelos.

City councilors of struggling Central Falls, R.I., want the bankruptcy court to oust state-appointed receiver Robert Flanders, who put the financially drained Providence suburb into chapter 9 last year, arguing that his power was meant to last only two years, Dow Jones DBR Small Cap reported today. The councilors asked Bankruptcy Judge Frank Bailey to order Flanders to "vacate and surrender the offices of government and prohibit [him] from taking any further action with respect to the lawful and elected government of the city of Central Falls" by July 16, according to court papers.

The author of California's four-month-old municipal bankruptcy restrictions is recommending revisions to broaden the powers of an outside mediator and loosen deadlines on negotiations with creditors and labor groups, Bloomberg News reported yesterday. Public employee unions are backing the new bill by state Assemblyman Bob Wieckowski (D), who wrote the law approved in September. It requires municipalities to undergo an evaluation or declare a fiscal emergency before filing for bankruptcy. Stockton, Calif., has invoked the process to help the community of 292,000 avoid becoming the largest U.S. city to enter bankruptcy since 2008, when Vallejo, with a population of about 116,000, sought court protection. California joined Indiana and Michigan in developing legislation to restrict filings. The League of California Cities opposes the new bill, saying that it would give outside mediators too much power and make it possible for unions and creditors to prolong the mediation process as cities run out of cash.

The Alabama State Senate yesterday approved a bill allowing cash-strapped Jefferson County to revive a local jobs tax that county officials say is central to working out its $4.27 billion bankruptcy case, Reuters reported yesterday. The bill, which must also be approved by the legislature's lower house and the governor, would allow any county in Alabama seeking relief from creditors under chapter 9 to levy and collect taxes. The bill is worth about $60 million a year to Jefferson County and passed in Montgomery with a vote of 16 to 11, with one senator abstaining.

While the city of Stockton, Calif., is attempting to stave off bankruptcy, its local economy is perking up and leading all other metropolitan areas in the state in terms of job growth, Reuters reported yesterday. The Business Forecasting Center of the University of the Pacific in Stockton estimates a 5 percent increase in payrolls in the Stockton region for the 12 -month period ending in March. Local job growth will run at about 4 percent this year and about 2 percent annually through 2016, according to the estimates. Stockton entered into negotiations with its creditors in March in an attempt to avoid becoming the largest U.S. city to file for bankruptcy.

Providence, Rhode Island's capital, had its rating cut by Standard & Poor's even as it seeks to repair its finances by overhauling an ailing pension system and extracting bigger voluntary payments from Brown University, Bloomberg News reported yesterday. S&P lowered Providence's credit grade one step to BBB, two levels above junk-bond status, citing “ongoing fiscal pressure” for retaining a negative outlook on the debt, meaning it could be cut again. The downgrade follows steps by Mayor Angel Taveras and the City Council to extract more cash from nonprofit organizations and lower pension costs. Brown, the Ivy League school started in 1764, said that it will boost the amount of payments in lieu of taxes to the city, agreeing to contribute $31.5 million over 11 years.