The Ridgewood Blog Brings a Free Market Laissez-faire Point of View to Local, New Jersey State and National Issues.
the staff of the Ridgewood blog
East Rutherford NJ, the American Dream megamall in East Rutherford, NJ, continues to face financial challenges as it missed a $287 million interest payment on Feb. 1, according to a notice from U.S. Bank, the bond trustee.
Continue reading American Dream Mall Misses $287M Interest Payment Amid Financial Struggles
Puerto Rico unveils fiscal reform plan, braces for cuts
SEPTEMBER 9, 2015, 8:54 PM LAST UPDATED: WEDNESDAY, SEPTEMBER 9, 2015, 8:55 PM
BY DANICA COTO
ASSOCIATED PRESS
SAN JUAN, Puerto Rico (AP) — Puerto Rico is bracing for widespread spending cuts after the government released a long-awaited fiscal reform plan on Wednesday that would reduce much of the island’s $72 billion public debt and calls for restructuring the remainder at the expense of bondholders.
The five-year plan proposes that the government cut subsidies to municipalities and the University of Puerto Rico, offer early retirement and reorganize or merge state agencies. It also calls on the government to extend until 2021 legislation that would freeze new hires, salary increases and collective bargaining agreements.
Gov. Alejandro Garcia Padilla acknowledged in a televised address that Puerto Ricans already have had to endure new taxes, an increase in utility bills and layoffs during a nearly decade-long economic stagnation.
“Our island faces an unprecedented fiscal and economic crisis,” he said. “We have asked our people for many sacrifices.”
During a background briefing late Tuesday, members of the group that worked on the plan said Puerto Rico’s Government Development Bank would run out of money by the end of this year if action is not taken and warned that the government would face a liquidity crunch next year if the plan is not implemented.
The U.S. Treasury said it was reviewing the plan and noted that Puerto Rico still needs an orderly process to address its liabilities.
“The situation remains urgent and requires the immediate attention of Congress,” the agency said. “Under the status quo, without a tested legal regime in place, a resolution of Puerto Rico’s financial obligations would likely be chaotic, protracted, and costly both for Puerto Rico and more broadly for the United States.”
https://www.northjersey.com/news/puerto-rico-unveils-fiscal-reform-plan-braces-for-cuts-1.1406256
Aug 3, 7:21 PM EDT
Puerto Rico made a partial payment of $628,000 in interest but could not afford to make the remainder, which was due Saturday, because the legislature did not appropriate the funds, said Melba Acosta Febo, president of the Government Development Bank.
The government had warned on Friday that it would not make the payment and argued that it should not be considered a default under a technical definition of the term, an argument rejected by Moody’s Investor Service and others.
“This event is consistent with our belief that Puerto Rico does not have the resources to make all of its forthcoming debt payments,” said Emily Raimes, a vice president at Moody’s. “This is a first in what we believe will be broad defaults on commonwealth debt.”