By Brandon Moseley
Alabama Political Reporter
On Monday, December 14, Jefferson County Circuit Judge Michel Graffeo ruled in favor of a lawsuit brought by State Representatives John Rogers (D) and Mary Moore (D) and taxpayer advocate Keith Shannon striking down the state law which would have allowed Jefferson County to refinance $600 million in outstanding school construction bond debt. The law allowed the County to divert $60 million of the savings to non-education related spending. State Representative Tim Wadsworth (R) said that the ruling would affect hundreds of local bills around the state.
Rep. Wadsworth said in a statement, “The decision by Jefferson County Circuit Judge Michael Graffeo voiding Act 2015-226 which allowed Jefferson County to refinance $600 million in school construction debt has far reaching consequences. The court ruled that the procedure set up in the legislature to pass local bills prior to the passage of a budget was improper. There has been over 500 local bills passed under this procedure since its inception 10 years ago. The decision to reverse this ruling with all likelihood will be decided by the Alabama Supreme Court. As a consequence of this ruling, certain proposed local school projects will be delayed. In addition, local bills passed over the last several years using that budget isolation procedure could potentially be in jeopardy. The legislature’s job is to solve state problems. So we need to roll up our sleeve and work together to solve this problem along with all the state’s other problems.”
Judge Graffeo ruled that the common practice of allowing local the issue to be voted on just by legislators representing the affected county violates the state Constitution. Only 13 legislators voted on the Budget Isolation Resolution (BIR) for the bill, which Graffeo wrote is insufficient to meet the requirement to allow the bill to move forward.
Jefferson County has announced that it will appeal the ruling.
For a decade, Jefferson County has been dealing with billions of dollars in debt racked up by former Jefferson County Commissioners, many of whom were later found guilty of accepting illegal gifts and bribes from the bond writers. Former Jefferson County Commission President Larry Langford (D), former Alabama Democratic Party Chairman Al Lapierre, and former Alabama Democratic Party Chairman turned bond writer Bill Blount all went to federal prison for their role in the scandal that involved rewriting bonds over and over again to generate more fees for Blount.
The mountain of debt eventually led Alabama’s largest county to declare bankruptcy. The county’s financial woes were exacerbated by a lawsuit brought by Keith Shannon pointing out that Jefferson County had been illegally imposing an occupation tax on workers for years after it was repealed by the legislature.
Efforts to re-impose the despised occupation tax were defeated by a bipartisan groups of legislators, which included Rogers and Moore, in the 2012 legislative session. Despite the loss of the tax revenue, Jefferson County was able to emerge from bankruptcy. To do that Jefferson County was forced to downsize it’s county government, including shutting down Cooper Green Hospital for the indigent and raise sewer rates.
The move to allow Jefferson County to tap some of those school bond dollars by refinancing was agreed to by legislators this Spring.
Judge Graffeo is a former Birmingham City Councilman. He was elected to the Jefferson County Bench in 2006.
(Original reporting by the Alabama Media Group contributed to this report)