BIRMINGHAM, Alabama Feb 3 (Reuters) - Alabama's
Jefferson County needs state help to fix chronic and crippling
budget gaps that could block a resolution of the county's
landmark $4.23 billion bankruptcy case, the head of the county
said on Friday.
"I am confident the sewer debt crisis will be successfully
resolved," David Carrington, president of the Jefferson County
Commission, told Reuters in an interview. "But without a general
fund fix, I am just as confident the county's general funds
revenues are not secure enough to support a plan to exit Chapter
Speaking ahead of Tuesday's opening of the regular annual
session of the Alabama state legislature, which holds unusual
sway over local government finances, Carrington said state
legislators need to restore a local occupational tax that was
declared unconstitutional last March by the Alabama Supreme
Legislators last year refused to reauthorize the tax on
people who work in regional business center Birmingham and
elsewhere in Jefferson County.
The occupational tax had generated $60 million a year for
Jefferson County, which has since cut staff by hundreds, shut
county buildings, and reduced policing, road maintenance and
other services as part of nearly $100 million in budget
The county now faces an additional $40 million shortfall in
Jefferson County officials also want lawmakers to give them
more discretion over spending by easing restrictions on about a
third of the county's current $217 million of revenue. So-called
earmarks cover a third of the current county budget.
"I do think eventually a consensus will be reached,"
Carrington said. "There is no chance we can exit Chapter 9
without a general fund fix."
On Nov. 9, after a tentative agreement with creditors
unwound, Jefferson County filed the biggest U.S. municipal
bankruptcy case, saying it was overwhelmed by $4.23 billion of
debt mostly caused by borrowing for a county sewer system.
Creditors such as JPMorgan Chase opposed the filing, and a
federal judge has yet to rule on whether or not the county is
eligible for Chapter 9 federal bankruptcy protection.
The case is In Re: Jefferson County, Alabama, U.S.
Bankruptcy Court for the Northern District of Alabama, No.
For Jefferson County: Patrick Darby of Bradley Arant Boult
(Reporting by Verna Gates; Additional reporting by Michael
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