Bankruptcy’s impact on Jefferson County, state

Nov 21, 2011 No Comments ›› Admin

by Slade Blackwell

Trussville Tribune

November 17, 2011

Last week, the Jefferson County Commission voted to file for Chapter 9 bankruptcy after an ongoing struggle to solve the sewer debt crisis that has plagued the county for years.

As I’ve stated before, I became involved in the Jefferson County sewer crisis even before I ran for state senate, believing that filing for bankruptcy would be detrimental to the well-being of citizens and rate payers. The county has lost all credibility and only time will tell how badly it will hurt Jefferson County and the entire state of Alabama.

Filing the largest municipal bankruptcy in U.S. history will undoubtedly make it increasingly difficult for Jefferson County and the state of Alabama to grow and expand in economic development. Bankruptcy will not wipe away the county’s debt and will only escalate spending by the county on legal expenses and bankruptcy lawyers. While there will be numerous negative impacts to bankruptcy, a few of them continue to stand out:

  • Causes Alabama to have a significantly higher borrowing cost in the bond market
  • Jefferson County’s credit rating of “Default” will remain for years to come
  • Puts Alabama and every municipality in the state at a disadvantage when recruiting new industry
  • Places the fate of Jefferson County citizens and rate payers in the hands of a federal judge
  • Doesn’t resolve the county’s debt
  • More than $1 million per month in legal fees going forward
  • Economic decline will lower property values across the county and state resulting in diminished budgets and discontinued services
  • Ability of issuing new bond debt for school construction, road projects, etc. will be non-existent for years to come in Jefferson County

I’ve been encouraged by the progress being made by elected officials and local business leaders on resolving the sewer debt crisis over the past several weeks and I hope this will continue. We should not let this bankruptcy filing halt all progress that was being made. I believe we can still get a resolution and, if so, the commission can always withdraw their bankruptcy filing. It’s time that the elected officials in the county and state come together to resolve this crisis–not spew rhetoric or politicize the issue with misinformation.