Moody’s: Lawsuit threatens Newark’s fiscal health
The long and short of it is the city may have some outstanding liability from a lawsuit involving tax collection from property tax revaluation back in 1999 — but the likelihood of a ruling against the city is pretty unlikely.
So much so that Moody’s reaffirmed their previous stable bond rating (a downgrade from 2006). Even the judge who initially ruled against the city in this matter reversed her ruling when the city put through retroactive legislation to compensate for the tax budgeting.
“An outstanding lawsuit that could force Newark to use $120 million in payroll and parking taxes collected from 1999 through 2004 for tax relief is a major liability to the city’s fiscal health, according to a report from Moody’s Investors Service.
In confirming a Baa2 bond rating with a stable outlook for Newark’s $302 million in long-term debt and assigning it’s highest short-term rating to $68 million in general improvement and school bonds, Moody’s said a judgment against Newark “could slow the city’s financial recovery.”
The Daily Newarker 