Jefferson County, Alabama

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Jefferson County, Alabama
Jefferson County Courthouse Birmingham Nov 2011 02.jpg
Jefferson County Courthouse in Birmingham
Location within Alabama
Location within Alabama
Map of the United States highlighting Alabama
Alabama's location within the U.S.
FoundedDecember 13, 1819[1]
Named forThomas Jefferson
Largest cityBirmingham
 • Total1,124 sq mi (2,911 km2)
 • Land1,111 sq mi (2,877 km2)
 • Water13 sq mi (34 km2), 1.1%
Population (est.)
 • (2017)659,197
 • Density595/sq mi (230/km2)
Congressional districts6th, 7th
Time zoneCentral: UTC−6/−5
  • County Number 01 on Alabama Licence Plates
  • One of three counties shuffled to the top 3 numbers because of population size.

Jefferson County is a county in the U.S. state of Alabama.

The county was named after Thomas Jefferson, the third President of the United States. The county has the largest population of all other counties in Alabama. As of the 2000 U.S. census, 662,047 people lived there.[1] The largest city in Jefferson County is Birmingham, Alabama.

History[change | change source]

Jefferson County was created by the Alabama legislature on December 13, 1819, 42 year before the American Civil War.[2]

Bankruptcy[change | change source]

Jefferson County was spending more than its total revenue, so it sold bonds to finance its operating deficits. Normally, governments sell bonds to borrow money to build infrastructure. But Jefferson County borrowed money to put off tax increases or service reductions. Jefferson County worked with Wall Street banks (such as J.P. Morgan) to sell the bonds and to make interest rate swaps on its debt. These financial deals happened in 2002 and 2003 while the economy was healthy. People who purchase bonds want to know the source of the money to pay back the bonds. So, Jefferson County used its sewer system fees to back its bonds. The county sold $3.14 billion in sewer bonds. It also paid the banks millions of dollars of fees for their help in selling the bonds and setting up the county's debt.

By 2011, Jefferson County could no longer borrow additional money and its total revenues fell because of the bad economy. So, the county went to Wall Street and asked them to forgive $1 billion of the debt. After months of talking, the county and the banks were $130 million apart from a final agreement. The banks wanted the county to raise sewer rates to cover the missing money. The county wanted the banks to forgive more debt.

On November 9, 2011, the county gave up and filed for bankruptcy. Jefferson County became the subject of the most expensive municipal bankruptcy ever in the United States, at $4.1 billion, with debts of $3.14 billion relating to sewer work. This means that a court will unravel what the county owes. Under bankruptcy, people who loaned money to the county will not get all of their money back.[3]

References[change | change source]

  1. 1.0 1.1 "ACES-Jefferson". Alabama Cooperative Extension System. Retrieved 2008-05-29.
  2. "Jefferson County Extension Office". Alabama Cooperative Extension System (ACES).
  3. Corkery, Michael (November 12, 2011). "Blame Flies in Alabama". Wall Street Journal. p. B16.

References[change | change source]