Alabama’s troubled Jefferson County may be forced to lay off nearly 700 employees – one-third of its workforce – as it struggles to avoid what would be the largest municipal bankruptcy in U.S. history.
County officials will meet today to discuss the layoffs, which are part of a plan to reduce the county budget by $12.3 million, The Birmingham News reports.
The cuts are needed to make up for a $70 million loss in occupational tax revenue this year. The state Supreme Court ruled in March that the tax was unconstitutional.
The revenue loss has compounded years of fiscal difficulties in Jefferson County, home to Birmingham, Alabama’s largest city and a key economic driver for the state. The county has teetered on the verge of bankruptcy since 2008, due to a $3.2 billion sewer debt.
To make matters worse, Jefferson County is also recovering from a devastating tornado that killed 21 people and destroyed more than 5,000 homes in late April.
County officials said Monday that the impending layoffs – which will affect all municipal departments – could have a huge impact on relief efforts in areas affected by the tornado.
“These steps are the beginning of a new era … a reduced level of services for the citizens of Jefferson County,” County Commissioner Jimmie Stephens told the Birmingham News. “We cannot generate any revenue. All we can do is balance the budget within the constraints of the revenue that we have. With less revenue we have no choice.”
Officials hope some relief might come from the Alabama state legislature, which could vote this week on a bill that would give Jefferson County limited home rule – including the authority to raise up to $50 million in additional taxes and levies.
The bill has been held up by Republican state Sen. Scott Beason (R-Gardendale).
Stephens told Reuters Monday that if the bill doesn’t pass, as many 1,000 county employees could face layoffs over the next year.
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