Lawmakers reach deal on occupational tax

BIRMINGHAM, AL (WBRC) - Jefferson County lawmakers reached a tentative deal Wednesday to try and avert massive layoffs and a possible default of payroll by the county after its occupational tax was declared illegal.

Fifteen of the county's 26-member legislative delegation met for more than four hours at Innovation Depot in Birmingham and agreed to work from a compromise bill proposed by State Sen. Steve French, (R)-Mountain Brook.

French's plan would reinstate the county's occupational tax at its current .05 percent rate, and would apply it to everyone, including licensed professionals like doctors and lawyers who were exempted under the previous tax. But the tax would only kick in above $16,000 of income and only up to $106,000, and would step down to .025 percent in 3 years, and be phased out completely by 2014. Senator French says the plan would effectively give an $80 tax break to taxpayers who have been paying the previous tax, while ensuring that the maximum any taxpayer would pay would be $450 a year.

Several lawmakers from both chambers took issue with parts of French's proposal including the rate to be charged, how much money it would actually bring to the county, and where the so-called floor and ceiling of the taxable income bracket should be placed. It appears there is a consensus to re-instate the tax and cover everyone, as well as having it phase out over time.

"The concern is that we don't throw good money after bad, and this is not a reward for doing a bad job," French said. "This is a bridge to get you to a better place. Nobody makes hard cut choices unless they're forced to, and nobody makes cuts unless they're facing a deadline, and this imposes a deadline."

"Politics is the art of compromise," Senate President Pro Tem Roger Smitherman, (D)-Birmingam, said. "And that sounds like a compromise we can work from to try to get to the end we need to get to."

"We're working towards a solution," State Representative Oliver Robinson said. "The French bill is a good foundation for us to work from. We got consensus on many things that's in that bill. We'll go from there and make other amendments but I think it's a great start."

The delegation will meet again on July 27th to hammer out the fine points of the compromise. If lawmakers can reach a consensus, they hope to start a special session called by Governor Riley on August 1st, and could pass a bill within five days. Jefferson County officials told lawmakers today they don't have the money to make payroll on August 7th. Lawmakers said after today's meeting they believe the county can access $18 million in an escrow account or get a short-term bridge loan to make that payroll if lenders know a replacement tax has passed the legislature.