Bankrupt Alabama County Cuts More Workers

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By Verna Gates

BIRMINGHAM, Ala., May 2 (Reuters) - Alabama's bankrupt Jefferson County is laying off more government workers as prospects for reviving a local employment-tax dim.

Lay-off letters have been sent to 75 employees of Jefferson County, the home of Birmingham, that last year filed America's biggest municipal bankruptcy, officials said on Wednesday. The county already employs some 700 fewer people than a year ago.

Eighty more layoffs are expected before the end of May according to County Manager Tony Petelos.

Slashing expenses is its only means to balance the county budget, since the jobs tax that delivered $66 million in yearly revenue seems unlikely to be restored by state legislators, according to County Commissioner Jimmie Stephens.

In Alabama, the state legislature controls taxation, leaving county officials powerless to generate new revenue on their own authority. And a divided Jefferson County delegation of state legislators, half Democrats and half Republicans, show no sign of agreeing on a bill. Without local support, the bill cannot pass in the current legislative session scheduled to end May 21.

County commissioners said a delay in authorizing a new jobs tax or another revenue fix will sour the county's exit from Chapter 9 bankruptcy because it will be unable to show it can repay even reduced debts.

"They (the state legislators) can keep kicking the can, but every year without a fix adds a year to recovery," Jefferson County Commission President David Carrington said.

With many operations decimated from layoffs, the efficiency in public services might fall further in a county where waits for car tags can extend past five hours, according to Stephens.

In departments such as Information Technology, staffs have been cut in half. Morale is low and absenteeism is high for stressed out workers, according to Kathy Burleson, president of the Jefferson County Employees Association.

Jefferson County in November filed for its $4.27 billion bankruptcy after the unwinding of a tentative agreement that might have cut the county's debt load by $1 billion. County finances had been savaged by massive sewer-system debt, political corruption and the loss of a vital local jobs tax. (Additional reporting and writing by Michael Connor in Miami; Editing by Andrew Hay)