Ruling Makes Detroit Biggest City To Qualify For Bankruptcy

English: Renaissance Center, GM World Headquar...

English: Renaissance Center, GM World Headquarters, Detroit, Michigan. (Photo credit: Wikipedia)

DETROIT — Detroit is eligible to shed billions in debt in the largest public bankruptcy ever in the United States, a federal judge ruled Tuesday, while also finding that the public pensions could be reduced during reorganization despite a provision in Michigan’s Constitution.

In ruling that Detroit was eligible to reorganize under federal bankruptcy law, Judge Steven W. Rhodes said the city met every test of insolvency, including failing to pay its debts and being unable to provide a minimum level of basic services to its 680,000 residents.

“This once proud and prosperous city can’t pay its debts,” the judge said. “It’s insolvent. It’s eligible for bankruptcy. But it also has an opportunity for a fresh start.”

Appeals were expected to be filed quickly. Bruce Babiarz, a spokesman for Detroit’s fire and police retirement system, which supports 8,500 retirees, said lawyers were reviewing the ruling and expected to file an appeal by the end of the week. But the case will continue to move forward, with the next step being the city filing a “plan of adjustment.” It is unclear, however, what portions of the judge’s ruling may be appealed.

Read more: http://www.nytimes.com/2013/12/04/us/detroit-bankruptcy-ruling.html?hp&_r=0

Easton Moves Forward With Commuter Tax

English: Skyline of Easton, PA from Lafayette ...

English: Skyline of Easton, PA from Lafayette College (Photo credit: Wikipedia)

Easton City Council approved a commuter tax Wednesday, raising the earned income tax for more than 10,000 people who work in Easton but live outside the city an average of $127.

City officials estimate the new tax will generate $1.35 million, which Easton can use only toward offsetting a $1.8 million increase in pension obligations. The commuter tax, which takes effect Jan. 1, raises the earned income tax for non-Easton residents from 1 percent to 1.75 percent, the same rate city residents pay.

Council’s 6-1 vote came after an impassioned debate between Mayor Sal Panto Jr. and Councilman Jeff Warren, who wrote a recent op-ed piece opposing the commuter tax. Panto accused Warren, the only council member to vote against the tax, of political grandstanding.

“You keep saying you’re against this but you haven’t laid out any alternatives,” Panto told Warren. “What are you coming up with? What is your solution?”

Read more: http://www.mcall.com/news/local/easton/mc-easton-commuter-tax-vote-20120808,0,1762718.story