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Alabama county facing bankruptcy

Marketplace Staff Sep 10, 2008
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Alabama county facing bankruptcy

Marketplace Staff Sep 10, 2008
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TEXT OF STORY

Scott Jagow: Jefferson County, Alabama, has its own serious financial problems.
Today, some local banks will meet with the county. They’re hoping to find a way to avoid one of largest municipal bankruptcies in more than a decade. From WBHM in Birmingham, Tanya Ott reports.


Tanya Ott: The clock is ticking. OK, it’s actually been ticking several months now. The county has $3.2 billion in sewer debt. The county has already missed several bond payment deadlines. And without a recent extension, it would have faced penalties and interest of $1 million a day. Wall Street isn’t pushing Jefferson into bankruptcy court — the banks could lose money if that happens. But everyone’s getting anxious. George Bowman is a Jefferson County Commissioner.

George Bowman: No one wants to see this county go bankrupt, and whatever we can do to forestall that, the governor has said he’s going to give it his best shot.

Some analysts say bankruptcy might be the best option. It worked for Orange County, California, back in 1994. But that might be like comparing California’s oranges to Alabama’s cotton. Orange County has one of the higher median incomes in the country, while 15 percent of Jefferson County’s residents live below the poverty line.

In Birmingham, I’m Tanya Ott for Marketplace.

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