How A $45,000 Budget Cut Costs A Bankrupt Alabama County $570,000 A Year


jeffcosewerIn Jefferson County, Alabama, a public employee layoff that saves a little over $45,000 per year is costing taxpayers millions.

The county, which went bankrupt in 2011, has missed out on $570,000 in tax revenue so far this year because it doesn’t have the staff to collect unpaid business property taxes. With $3 million in outstanding, uncollected business property taxes, the county’s tax collector has zero agents for the city of Birmingham and only one for neighboring Bessemer.

The collector, J.T. Smallwood, told The Birmingham News he has requested funds to hire two tax agents at about $45,000 per year in salary. The county manager, Tony Petelos, told the paper to expect budget approval to hire one agent for the upcoming fiscal year, but Smallwood believes some serious damage has already been done. “The close relationship we have had with the business community has been compromised with the absence of a field presence,” the tax collector said. Smallwood also said the office collected $560 million in the previous fiscal year despite its lack of adequate staff.

But Jefferson County is not a community that can afford to miss even 1/1000th of its tax revenues. When it declared bankruptcy after a web of financial swindles and local bribes that funneled billions to banks like JP Morgan Chase, Goldman Sachs, and Lehman Brothers left the county insolvent, it was the largest municipal bankruptcy in U.S. history. (It lost that title to Detroit this summer.) In the intervening years, it cut public services, putting 1,000 county employees on extended unpaid leave. Sheriff’s deputies stopped responding to traffic accidents. The hospital that served the county’s poor closed its inpatient wards. And county residents, a fifth of whom can’t afford adequate food, will see their sewer service fees increase by about a third over the next four years.