Sewer System Puts County Knee-Deep In Debt
STEVE INSKEEP, Host:
Some pessimists might describe the U.S. economy as going down the drain, but if you go to Jefferson County, Alabama, it really is in the sewer. So our last word in business today is sewage debt. The county, which is home to Birmingham, is sinking under more than $3 billion in debt that officials took on to finance their sewer system. The complex financing that they used - like auction rate securities - have turned toxic on the financial markets because of the credit crunch, and so interest rates are soaring. If officials cannot work out a deal with lenders they may declare bankruptcy as early as today. And it would be the biggest local government bankruptcy since Orange County, California in 1994.