BRADENTON, Fla. — Even with their largest county in bankruptcy, Alabama state legislators refused again to provide fiscal relief to Jefferson County and ended their regular session at midnight Wednesday.
It is at least the third year that Jefferson County has failed to muster the support of lawmakers who are the only ones who can authorize counties to raise taxes.
Rep. John Rogers, D-Birmingham, convinced fellow lawmakers to remove Senate Bill 567 from the special order calendar so that it did not come before the full body for consideration.
Rogers said the bill would tax Jefferson County residents to death, and called it “cruel and inhumane.”
SB 567, which passed the Senate on a vote of 16-to-11 early this month, would have enacted the Alabama Financially Distressed Counties Act and allowed counties in bankruptcy to impose a sales tax up to 1% or an occupational tax up to 0.5%. It only affected Jefferson County.
In an interview with a local television station before killing the bill, Rogers said he had concerns about Jefferson County raising taxes to pay off Wall Street. However, SB 567 would have prohibited the use of tax collections to pay secured debt such as the county’s controversial $3.14 billion of sewer warrants in default.
When asked to comment on the failure of the bill, county commissioner Jimmie Stephens said, “It means that we will produce a $180 million budget.”
Jefferson County had a budget of around $700 million before the recession, and the state courts struck down a previous occupational tax because it was improperly enacted by the Legislature.
The loss of the job tax, which provided a significant source of revenue for the general fund, has forced the county to fire 800 employees out of a workforce of 3,600 and severely cut services.
In November, the county filed the largest municipal bankruptcy in the U.S. after failing to negotiate restructuring of the sewer debt, and loss of the job tax. The county has a population of 658,466. The county seat is in Birmingham, which has an occupational tax.
Some bankers have said that borrowing costs for municipalities outside Jefferson County have risen as much as 30 basis points since the county filed its Chapter 9 bankruptcy petition.
