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As the largest county in Alabama, Jefferson County, home to Birmingham, is a key economic driver for the state. A bankruptcy filing would likely have significant spillover effects on the fiscal health of the county's school districts and municipalities, as well as lead to higher borrowing costs for the state and local governments.
BIRMINGHAM, Ala. (AP) — Alabama's largest county is laying the groundwork for filing what would be the largest municipal bankruptcy in U.S. history, over a more than $3 billion debt for its sewer system.
The Jefferson County Commission approved resolutions Tuesday to hire prominent bankruptcy lawyers and to sell bonds later in case money is needed to emerge from bankruptcy.
Jefferson is Alabama's most populous county and seat of Birmingham. It's been trying for three years to avoid filing bankruptcy over debt payments it can no longer afford.
Two of the five commissioners say there's an 80 percent chance the county will file bankruptcy. The vote could come at a meeting scheduled for Thursday in Birmingham.
The commission president, David Carrington, says other possibilities include extending talks with creditors or accepting a settlement offer.
Originally posted by wiandiiiThe capitol city of my state, PA, which is Harrisburg, is also having some serious financial issues. Its debt is centered around a trash incinerator which has been bleeding money since its inception. The state government gave the city of Harrisburg an ultimatum to sign stating that they weren't allowed to claim bankruptcy with the threat of withholding funds. There was also some provision about the state kicking out the locally elected officials and sending three people of there choosing to run the city.