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Alabama county that includes Birmingham is on the brink of bankruptcy

BIRMINGHAM, Ala. — As a government shutdown loomed, residents of Alabama's most populous county lined up Friday to renew their car registrations and settle their tax bills.

By Monday, at least a quarter of the county's 3,600 employees will be on unpaid leave and many county offices will be closed or cutting back hours.

The county, with 640,000 residents, has been on the brink of filing the nation's largest municipal bankruptcy for the past year due to a sewer bond fiasco that remains unresolved. Then things got worse: A judge ruled the county's occupational tax is illegal and courts refused to let the county spend the revenue from it while officials appeal.

Long lines formed at the Jefferson County courthouse and satellite offices Friday.

"This is disgraceful and it's only going to get worse," said retired lawyer Robert Eubank, who got in line at 7:30 a.m. and waited more than two hours to renew a car tag.

At least 900 county workers will be furloughed starting Monday. The number could grow if the situation isn't resolved.

The news isn't all bad: Two of the county's largest agencies — the Sheriff's Office and Cooper Green Mercy Hospital, each with more than 700 employees — will be spared. A judge blocked sheriff's staff cuts, and the nonprofit hospital has separate funding.

But satellite courthouses, where residents can buy tags and licenses and pay taxes without having to go downtown, are closing, and offices at the main courthouse downtown are trimming hours.

About 60 county workers and supporters protested Thursday at the downtown courthouse. An employee was arrested, accused of sending e-mails threatening to bomb the building.

Jefferson County legislators, who could not agree on a new tax during the regular legislative session earlier this year, met Tuesday to try to reach a consensus. The old tax provided some $75 million annually, about one-third of the county's budget. A judge, however, ruled that the tax was repealed by a law passed in 1999.

Gov. Bob Riley, who refused to issue an emergency declaration sought by County Commission President Bettye Fine Collins, has promised to call a special session in August if the county's legislators can agree on a bill.

The budget crisis struck while county officials were wrestling with the prospect of filing what would be the largest municipal bankruptcy in U.S. history over some $3.9 billion in sewer bonds it can no longer afford to repay.

Alabama county that includes Birmingham is on the brink of bankruptcy 07/31/09 [Last modified: Friday, July 31, 2009 11:09pm]

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