Alabama state Rep. John Rogers, D-Birmingham, has announced that he will sponsor legislation to re-institute an occupational tax for bankrupt Jefferson County.
Rogers, who defeated a bill in 2012 that would have provided a source of revenue to the county, said during a press conference last Friday that portions of the job tax would be earmarked toward payment of the county’s $3.14 billion of defaulted sewer debt.
“There is quite a problem in New York with the county not paying its debt,” Rogers said in an on-camera interview with the Birmingham News, referring to investors. “You make a debt, you’ve got to pay the debt.”
The federal judge overseeing the county’s case has chastised Alabama lawmakers for precipitating the bankruptcy.
Two previous laws enacting an occupational tax were struck down by the state Supreme Court.
The tax, collected for years while lawsuits were pending, brought a significant amount of revenue to the county’s general fund.
When the loss of the tax collided with the economic downturn and threatened cash flow, the county filed for Chapter 9 bankruptcy in November 2011 without reaching a deal to restructure debt associated with its overleveraged sewer system.
County Commission President David Carrington told the newspaper that Rogers’ bill, as proposed, would open the general fund to creditors by earmarking job-tax revenues to pay sewer debt.
He said that “could be disastrous” since those creditors are only entitled to sewer system revenues.
Rogers has also prepared another bill that would create a health care authority to reopen Cooper Green Mercy Hospital, the indigent facility that the county closed Jan. 1 because of its drain on the general fund.
Instead of running a hospital, the county is providing care through clinics and assisting low-income patients who need hospitalization elsewhere.
Rogers’ hospital bill would earmark a portion of the new occupational tax collections for use by Cooper Green.