Alabama's Jefferson County to put workers on leave

BIRMINGHAM, Alabama Tue Jun 7, 2011 1:13pm EDT

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BIRMINGHAM, Alabama (Reuters) - Alabama's troubled Jefferson County is to put one-third of its workers on administrative leave without pay from Monday because of a shortfall in its operating fund, the county said on Tuesday.

The $9 million per month shortfall will not affect revenue streams targeted to the county's separate $3.2 billion debt on sewer bonds, county commission president David Carrington told a county finance committee meeting.

The fiscal gap appeared in March when a state court ruled a tax for the county was unconstitutional. Officials say that without that tax revenue the country will run out of operating funds in July.

The county is also struggling to ward off what would be the largest municipal bankruptcy in U.S. history over a debt it owes on sewer bonds.

In all, 967 workers will be placed on administrative leave for a minimum of 60 days.

"Dedicated revenue streams (including the sewer debt) will not be affected," Carrington said, adding that payroll represented around $12 million a month of the $16 million required to run the county.

The county's largest city, Birmingham, is the biggest in Alabama and a key driver of the state's economy.

"We want to do this in an orderly fashion with the minimal impact on the citizens but this is what we were elected to do," said county finance commission chairman Jimmie Stephens, adding that the county is only generating $7 million in operating fund revenue.

"Of the 967 workers going out on leave without pay, some will be laid off permanently," Stephens told the meeting.

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