JeffCo Stands Pat on Tax

Jefferson County will not ask the Alabama Supreme Court for a rehearing on its occupational tax ruling, the Birmingham News reported Tuesday.

The court last week unanimously struck down the tax, which provides one-fourth to one-third of the revenue supporting the county’s general fund budget.

The County Commission will notify employees to immediately stop collecting the 0.45% tax and begin working with lawmakers on another revenue source, according to the newspaper. Commissioners are asking the Legislature to consider a half-cent increase in the local sales tax.

In a weekly credit report Monday, Moody’s Investors Service said the loss of the tax further exacerbates Jefferson County’s strained financial operations. The county has $120 million of variable-rate general obligation warrants paid from the general fund that are held as bank bonds with accelerated payments on which the county has defaulted.

“Even if the county is able to find the means to balance its general fund budget, the county’s credit profile will remain significantly challenged owing to the ongoing default on general obligation bank bond principal payments,” Moody’s said. “There is also continued risk that the county will file for federal bankruptcy protection under Chapter 9, which it has publicly recognized as an option since the financial crisis related to the county’s sewer system began three years ago.”

Moody’s Caa1 GO rating and negative outlook incorporates ongoing default and loss expectations, the report said.

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