In case you haven't heard, Jefferson County, Alabama (JeffCo) commissioners have voted to declare the largest municipal bankruptcy in history. This did not happen overnight -- in fact, it required decades of poor leadership.
Rolling Stone writer Matt Taibbi, who has followed the story closely, points to Wall Street's "continual screwing" of JeffCo and the way their Washington representative, Spencer Bachus, has held up new Dodd-Frank regulations that would prevent further screwing. (Click here for a detailed history of the bond issues that sank JeffCo.)
A court ruling nixed the county's occupational tax in 2009, right as the county's bond fees were inflating. JeffCo was forced to refund tax receipts in hand. By 2010, State Senator Scott Beason (who wants to "empty the clip" on illegal immigration) single-handedly killed an attempt to reinstate the tax, saying he did not think "new taxes" were needed. JeffCo leaders simply wanted their old taxes back, but it didn't matter: JeffCo is a victim of conservative, "smaller gummint" austerity politics run amok.
Alabama's first Republican legislative majority in 136 years was determined to cut every department and not raise one red cent of revenue. In a state that taxes millionaires at half the rate of its poorest residents, this was a scheme to make Grover Norquist squeal with delight: JeffCo couldn't bury the dead or feed juveniles in lockup. Bond fees were four times the size of JeffCo's education budget shortfall. County reserves were being depleted as JeffCo held out for state leadership -- and got none. Governor Robert Bentley was a particularly inept crisis-manager:
Virtually the moment the deal was struck with Wall Street, Gov. Robert Bentley assured media from other parts of the state that the rest of Alabama would never have to pay for another Jefferson County default. If Jefferson County could not pay, the money to meet the county’s obligations would come from the county’s taxpayers, Bentley told the Montgomery Advertiser. In essence, if the county can’t pay, the county would have to pay, and the moral obligation of the state would mean as much as the bond insurance the county once bought to cover its debts in the event of its last default — absolutely empty.
It was the kind of uninformed political bumbling the governor has been prone to since being elected to office. It’s tempting to label the new governor as Guy Hunt M.D., but Gov. Hunt showed more political aptitude than Bentley, at least judging by how the governor has handled this crisis. For several months during the summer, the county commission was close to filing Chapter 9, but at the governor’s insistance, the county continued negotiating with Wall Street. The implicit message to the county was that the governor’s office would take care of the next steps in Montgomery, or at least offer substantial assistance. That the governor could not extrapolate what would happen once a Wall Street bargain reached Goat Hill should give Alabamians cause to worry about the state’s future.
At LiA, Mooncat recounts Bentley's disastrous flip-flopping:
In September, Bentley said he would likely call a special session of the Legislature to deal with the JeffCo crisis. In October, he cast doubt on that possibility. Last week Bentley said there would be NO special session of the Legislature. This morning he'd changed his mind once again and said he was now ready to call the Legislature into special session.
And it's only going to get worse:
“Things will get worse in December,” Stephens said. “Our revenues and expenses are still approximately $40 million apart, so we’re going to have to reduce services, as administered by the county, by roughly $40 million in the last quarter of this year. We are looking at all of those services that are not mandated by the constitution.”
Some commissioners, and County Manger Tony Petelos, do not believe that the county will be able to fulfill its constitutionally mandated services without new revenue.
But we can't blame this mess on Republicans alone. JeffCo's crisis began with an EPA consent decree in 1996 that forced the county to upgrade an inadequate sewer system -- inadequate because the Birmingham metro area has been subject to decades of neglect and abuse by state lawmakers. Infrastructure has lagged behind the pace of sprawl since at least the 1970s. The men who made those decisions called themselves "conservative" and meant it, especially when it came to public services for
black people the state's largest urban zone.
Birmingham took a century to get here, and without a serious change the city will need another century to get out. The problem is that nothing has changed, except for the worse. The new boss is the same as the old boss, and he's come to his office with a fanatic zeal for doing nothing.
Related video: I spoke with Johnathan Austin, Birmingham's District Five city councilman, at the Alabama Community Leaders Institute at the campus of Alabama A&M in Huntsville on August 26th to learn about the challenges of urban leadership in Alabama.