BRADENTON, Fla. - Jefferson County, Ala., has appealed a judge's ruling that struck down a state law that would have allowed the county to issue debt for the first time since emerging from bankruptcy.
Opponents of the law, despite winning the case, said they also planned to file an appeal because the judge did not address three of the four grounds they said proved that the law was unconstitutional.
The appeals center on Jefferson County's request to have the court validate $595.5 million of limited obligation refunding warrants that the county had hoped to issue in a private placement before the end of 2015.
The refunding warrants could have maturities up to 40 years, according to the validation complaint.
The county planned to use the refunding proceeds to defease $595.5 million of outstanding limited obligation school warrants for which the final maturity is in 2027.
On Dec. 16, Circuit Judge Michael G. Graffeo ruled that the warrants could not be validated because House Bill 573, a local act authorizing the county's refunding plan, violated the state constitution.
Graffeo said that the bill failed to pass by three-fifths of a quorum, a voting procedure required by the constitution because the Legislature had not passed a budget.
Graffeo said that because he determined that a voting violation occurred, he "need not reach nor discuss the other three contentions" about the bill's constitutionality that were raised by the defendants.
The county's appeal to the Alabama Supreme Court was filed shortly after ruling was handed down, county commissioner David Carrington said Monday.
Carrington had previously said that if left standing, the judge's decision could have far-reaching impacts.
"Hundreds of other local acts affecting cities and counties throughout the state have been adopted using the same procedure," he said last month.
The suggestion that the ruling could upend other legislation is "hyperbole," said attorney Calvin Grigsby, a former broker-dealer representing county tax assessor Andrew Bennett, state Reps. John Rogers and Mary Moore, and county resident William Muhammad.
"No one has cited to you what far reaching effects there will be," Grigsby said. "They've not cited any other bill that will be overturned."
Grigsby said he planned to file an appeal of Graffeo's ruling because other constitutional issues his clients cited in the case are just as strong as the "more technical issue of whether there was a quorum."
Those issues include supplanting a general law with a local law such as HB 573; using a local law to regulate the assessment or collection of taxes; and approving a local law that authorizes bonds to be issued without the approval of voters.
Carrington said he believed that the Alabama Supreme Court would only address the issue cited in Graffeo's ruling.
The county sought the refunding legislation in the 2015 annual session of the Legislature as part of a strategy to provide new income to partially replace an occupational tax that was struck down by the courts shortly before the county filed for bankruptcy in November 2011.
That strategy involved sunsetting a one-cent sales tax securing the school warrants, and enacting a new sales tax to secure the refunding warrants.
The new sales tax would also provide additional revenue for the county's general fund and other specific uses.
The county is struggling to find new sources of revenue since emerging from bankruptcy on Dec. 3, 2013 after issuing $1.8 billion in sewer refunding warrants to write down $1.4 billion in related sewer debt.
The bankruptcy plan is being appealed by the same group that challenged HB 573.
