Alabama's Jefferson City mulls public worker layoffs

Reuters News
Posted: Jun 06, 2011 7:08 PM
Alabama's Jefferson City mulls public worker layoffs

By Melinda Dickinson

BIRMINGHAM, Alabama (Reuters) - Alabama's troubled Jefferson County says it may have to lay off up to 1,000 workers due to a $70 million shortfall in its operating revenue that is adding to its chronic debt problems.

The fiscal gap appeared in March when a state court ruled a tax for the county unconstitutional and officials says that as a result it will run out of operating funds in July.

It is also struggling to ward off what would be the largest municipal bankruptcy in U.S. history over a $3.2 billion debt it owes on sewer bonds.

"There are close to 1,000 layoffs on the table. Even if the bill passes, the footprint of government in Jefferson County is still going to change drastically. We don't have a choice," county finance commissioner Jimmie Stephens told Reuters.

County officials hope the state legislature will be able to cover part of the shortfall through a bill that could inject up to $50 million into county coffers but a state senator is holding up the bill, according to local media reports.

Republican Scott Beason refused to allow the bill to permit the county to raise its own taxes to go before the senate for a full vote, arguing lawmakers need more time to hear from constituents.

The bill in question, HB 650, would give the county limited "home rule," which is the ability to levy or raise certain taxes including a sales taxes.

Under Alabama's constitution, only the state legislature has the authority to levy taxes for the county.

According to local media reports, Beason will only consider allowing the bill to go before the full senate for a vote on Thursday, the last day of the legislative session, making its passage into law difficult though not impossible.

"There is no good reason for Beason to block the senate from voting on the taxing authority bill. His judgment isn't worth more than that of the other senators in the (Jefferson County) delegation," the Birmingham News newspaper said in an editorial on Monday.

Birmingham, at the heart of Jefferson County, is Alabama's largest city and a key driver of the state economy.