Alabama's Largest County Faces Bankruptcy Jefferson County can't make its payroll and plans to furlough two-thirds of its workers, about 1,400 people, on Friday. The county's occupational tax, which brought in $75 million annually, was struck down by a court on constitutional grounds. Now the county's lawmakers can't agree on a bill to bring it back.
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Alabama's Largest County Faces Bankruptcy

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Alabama's Largest County Faces Bankruptcy

Alabama's Largest County Faces Bankruptcy

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Alabama's largest county is in financial turmoil. Jefferson County, where Birmingham is, cannot make its payroll. At the end of this week, it plans to furlough two-thirds of its workers. The courts have struck down a major source of the county's funding and local politicians can't seem to agree on a fix.

NPR's Debbie Elliott reports from Birmingham.

DEBBIE ELLIOTT: Jefferson County Commission President Betty Fine Collins had grim news for county workers this week.

Ms. BETTY FINE COLLINS (President, Jefferson County Commission, Alabama): We are going to, as of Friday, effectively place up to 1,400 people on administrative leave without pay. We're in lockdown. It means that we can't operate in many areas.

(Soundbite of courthouse)

Unidentified Man: (unintelligible) All right.

ELLIOTT: One of the many areas of concern is here at the county courthouse in downtown Birmingham. Teams of security officers operate metal detectors at the building's three public entrances.

(Soundbite of courthouse)

Unidentified Man: Sir, are you wearing a belt?

ELLIOTT: The county's finance director has warned judges that the 80-person courthouse security squad will be cut to only five officers. Every county department will be left with a skeleton crew. News of the cuts had residents lining up for hours to take care of their business. Daniel Ellis came to get a car tag.

(Soundbite of courthouse)

Mr. DANIEL ELLIS: All the satellite courts are closing on Friday. This will be the only one open. So it'll be twice as bad next week. It's just mismanagement. They just haven't done a good job of what they've been given.

ELLIOTT: But Commissioner Bobby Humphryes says the problem is the courts have struck down the county's occupational tax, taking away about a quarter of its budget.

Mr. BOBBY HUMPHRYES (Commissioner, Jefferson County Commission): I've been describing it as the perfect storm. Just like all across the country, our sales tax are down, our ad valorem taxes are down, you know, and all the tax collections are down. And then, in addition, this $75 million has been taken away just abruptly.

ELLIOTT: The ruling comes in a decades-long battle between Alabama lawmakers and the county government. The state's antiquated constitution limits home rule and reserves for the legislature the power to raise local taxes. And some members of the Jefferson County legislative delegation, including Republican state Senator Jabo Waggoner, don't like the occupational tax.

State Senator JABO WAGGONER (Republican, Alabama): Taxing people for the right to work, that's not a good tax.

ELLIOTT: The tax is particularly unpopular in the mostly white suburb surrounding Birmingham. The county's legislative delegation has been unable to agree on a bill to reinstate the tax. The divide was on display this week at a meeting called to address the financial crisis.

Here's Democratic state Senator Linda Coleman.

State Senator LINDA COLEMAN (Democrat, Alabama): I'm sitting here listening and there's always something else that comes up, whether we're going to fund set it(ph), whether we're going to have a cap, whether we're going to have a floor? How many people are we going to include? We are at the point where the house is on fire and it seems like right now we're bringing kindling wood to throw on the fire.

ELLIOTT: As lawmakers inside squabbled over when to meet next, county workers protested outside. They're irate. Kathy Burleson is secretary of the Jefferson County Employees Association.

Ms. KATHY BURLESON (Secretary, Jefferson County Employees Association): These people have been messing around for 10 years not passing this tax, going back and forth about it. And the public has not held them accountable to doing their jobs. You know, this has been a problem. Everybody knew this was coming.

ELLIOTT: Now, the county's nearly 700,000 residents will feel the impact of the ongoing power struggle, says Birmingham News columnist Eddie Lard.

Mr. EDDIE LARD (Columnist, Birmingham News): We have this standoff, and unfortunately, county workers and county residents are the victims for that. They're the roadkill in this collision between the county and the legislative delegation.

ELLIOTT: New power struggles are emerging. The tax assessor is threatening to go to court. And Sheriff Mike Hale has already successfully sued to prevent cuts to his budget.

Sheriff MIKE HALE (Jefferson County, Alabama): If we're going to turn out the lights to county government, I would expect it to be a deputy sheriff that flips the switch.

ELLIOTT: And there's a much bigger legal matter looming. Jefferson County's sewer system is on the verge of bankruptcy, unable to pay a mounting $3.9 billion debt. Back at the courthouse car tag line, resident Robert Coleman says the financial crisis is not good for Alabama.

Mr. ROBERT COLEMAN: Well, it's embarrassing. It makes us look as though we can't manage our money in our largest county.

ELLIOTT: As the lines at county offices have grown longer this week, the public outrage - muted until now - has grown as well.

Debbie Elliott, NPR News, Birmingham.

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