The Jefferson County Commission has enacted a new occupational tax, as required by the Alabama Legislature, but a local dentist has filed a lawsuit challenging it.

The new tax, which was reauthorized in a special session by lawmakers in August, will be reduced to 0.45% from 0.5% starting tomorrow, Jan. 1. It also applies to professionals such as attorneys, doctors, and engineers who were exempt under a previous occupational tax law because they also pay for professional licenses. That exemption was removed by the Legislature.

Jeffrey Weissman, the dentist, filed a lawsuit Dec. 16 challenging the constitutionality of the occupational tax on professionals, according to the Birmingham News.

The new tax was required because a local judge early this year struck down Jefferson County’s previous occupational tax.

The judge ruled on Dec. 23 that Jefferson County must return $50.2 million of the occupational tax proceeds collected before the state lawmakers reauthorized the tax in the special summer session.

The old tax was a significant source of revenue for the general fund, and before it was reauthorized the county was forced to make budget cuts and lay off about 1,000 employees for two months.

Once collections began after the tax was reauthorized employees slowly returned to work.

The funding problem seemed to eclipse Jefferson County’s other financial crisis for most of the year: its troubled $3.2 billion of auction- and variable-rate sewer debt.

Jefferson, Alabama’s biggest county and home to Birmingham, has been unable to restructure the sewer debt. Sewer revenues are not enough to make principle and penalty interest rate payments, and the county has defaulted on the non-recourse debt.

Jefferson County also has $120 million of general obligation debt that is in variable-rate mode and has not been restructured. The county had negotiated forbearance agreements on the sewer and GO debt but many have lapsed.

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