Things could be worse
If you ever thought the finances of the Chilton County Commission were bad, you haven’t seen anything. According to an Associated Press story, Alabama’s largest county appears headed for the biggest municipal bankruptcy in U.S. history, a $3.2 billion mess created by the nation’s credit crunch and a colossal, corruption-riddled sewer project.
A bankruptcy filing by Jefferson County would shatter the previous record of $1.7 billion, set by Orange County, Calif., in 1994.
Politicians in Jefferson County are struggling to find a way out of the jam, but they have mostly abandoned talk of raising taxes and fees after running into fierce opposition at raucous public meetings.
“The entire nation is watching to see how we handle this,” said Jeff Sewell, an assistant county attorney. “This is a question of character as well as one of finance.”
A Chapter 9 bankruptcy filing would put interest payments and lawsuits against the county on hold, giving it time to put its finances in order and negotiate more favorable terms with its creditors.
But it could also lead to tax increases, spending cuts and layoffs among the county’s 4,000 employees.
Wow, it is horrible to see the state’s largest county put in that position. That will not only ruin the reputation of the Birmingham area, but it will have major ramifications for the entire state. While we might not see an immediate impact, the ripple effects would likely be felt as far away as here. If Jefferson County doesn’t have the ability to lure new business to the area, there is a possibility it could cause the whole Birmingham-Hoover area to stop growing. Since we are on the edge of that area, it is possible we could be at risk, too.
We’ve already seen a slump in growth due to the housing market slowdown. Now, it’s possible for that growth to come to a standstill because no one would want to move into the Birmingham area.
We hope Jefferson County will be able to pull out of this difficult situation, but nonetheless, we all need to keep an eye on what is going on in the state’s largest metro area.