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Alabama county in slow budget battle

Jefferson County, Alabama logo.

TEXT OF STORY

Kai Ryssdal: As Bob just mentioned, timing is everything. Talk of the end of the recession means companies are calculating what to do with the size of their inventories and of their staves. But there are still places that are trying to dig themselves out of the economic mess. Case in point: Jefferson County, Ala. Over the weekend, Alabama's biggest county laid off nearly 1,000 employees -- a quarter of its workforce -- to deal with its budget situation. From WBHM in Birmingham, Tanya Ott reports.


TANYA OTT: It's a mess today in Jefferson County. People have been waiting in line for hours for driver's licenses and car tags. There aren't enough investigators to handle child-abuse cases or enough building inspectors to approve new construction.

Wes Gregory is a 12-year veteran of the county road department. He and his wife have a baby on the way, and he just got laid off.

WES Gregory: I've just been trying to look for little small jobs that I can do here and there. Like if someone needs their grass cut. That's fine. Anything that will bring in a little money right now.

Jefferson County needs to trim a lot of money -- $75 million -- after a judge ruled a key tax illegal. The county also faces dwindling sales and property tax revenues. And that has put Alabama's largest county in financial crisis.

Bettye Fine Collins is president of the County Commission:

BETTYE FINE Collins: When you serve in public office, nobody promises you a rose garden. Of course, I didn't know that we would wind up in some gothic situation here.

Commissioners' hands are tied. Under Alabama law, they can't pass new taxes. Only the state legislature can. And this spring, legislators squabbled over a fix. State Representative Patricia Todd says county commissioners haven't been much help.

PATRICIA Todd: They've come to one meeting we've had. They were very defensive when we ask questions about things.

State lawmakers meet again this week to hammer out a compromise. In the meantime, nearly a 1,000 county employees remain on unpaid administrative leave.

In Birmingham, Ala., I'm Tanya Ott for Marketplace.

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The Jefferson County Commission set a date of August 1, 2009 to pull the plug on a county financial system that is on life support and hemorrhaging money at an alarming rate. One has to ask the question is this another brilliant move by our crafty county Commission to blackmail our Jefferson county State legislative delegation into reinstating the occupational tax, or is it as I suspect the final straw that will break the backs of the residents of Jefferson County. The county has more than 3500 employees that it can no longer afford to pay. This comes as the Commission earlier decided to reduce the normal 40 hour work week to just 32 hours affecting some 3000 plus workers. With everything that has happened in this soap opera style governmental body it’s no wonder Jefferson County as well as the state of Alabama seems to be the butt of so many bad jokes. To date the county is still refusing to see the writing on the wall. Closing satellite offices in Center Point, and Homewood, laying off workers, canceling contracts and failing to fully meet its financial obligations is no way to run a County government with an annual budget of over $600 million. If the county wants to truly get a handle on its finances the commission will not only consider, but it will vote unanimously for a complete reorganization of its finances.
When the county finally does what it should have done more than a year and a half ago it will have a chilling effect on the creditors and bold holders. It will force them to come to the same realization that so many residents in Jefferson County already know. We are BROKE. This process was started over 12 years ago when the county decided to borrow more than $3 billion dollars to repair and upgrade both the sewer and storm water systems to protect the Cahaba River and expand the sewer for future growth. Over the last 12 years those citizens that are connected to the sewer system have seen their bills climb by some 392%. The average sewer bill is now $63 a month which is three times the amount of the monthly water bill. And if the bond holders and the creditors get their way we will see our bills climb another 400% in the coming years. There is one undisputed fact that should not be ignored; we have paid hundreds of millions in finance charges and closing cost to multiple creditors, friends of commissioners, bond holders and contractors through the many refinances. We the citizens of Jefferson County owe just as much today as we did in 1999, with one small caveat and that’s the $735 million we were charged to get out of the bad bond swaps that Larry Langford and his fellow commissioners approved.
The plans coming out of Montgomery resemble the chaos of our own County Commission. They range from reinstating the occupational tax with the professional exemption still in place, lowering the tax from .5% to .45%, reinstating the .5% tax and phasing it out the next 5 years, to what I consider to be the most dangerous option which is forcing the county to hire a county manager to run the day to day operation.

Don't let that Jefferson County story make it out like the current recession is what's causing their problems. They've been going under for a while.

If you think credit-default swaps are shaky business, you should look into the things that the county commission did when Larry Langford (current Birmingham mayor, future convicted felon) was commission president.

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