JeffCo approves occupational tax settlement

A two-year old lawsuit over Jefferson County’s occupational tax has been settled after the county commission voted unanimously Tuesday morning to approve the agreement with plaintiffs’ lawyers.

Plaintiffs’ lawyers have been fighting the commission in court over $50 million of occupational taxes that has been held in escrow. The plaintiffs have argued that the county collected those funds when it had no authority to do so.

Under the agreement, $30 million will be refunded to taxpayers, after attorney fees have been deducted. The county will also pay $1.1 million to a court-appointed special master, who will be in charge of distributing the refunds. Also, the county will not attempt to recoup the lost taxes with a retro-active occupational tax — a measure the plaintiffs had labeled a “revenge tax.”

Despite the agreement, commissioners expressed their displeasure over the fees the plaintiffs lawyers will be receiving. Commission President Bettye Fine Collins said taxpayers had little say in what was happening, supposedly on their behalf.

“Most of this money is going to go to lawyers they don’t know that they never hired to represent them,” Collins said.

As part of the settlement, the commission insisted taxpayers be told they can challenge the fees those attorneys collect, Collins said.

Collins blamed the occupational tax crisis on the county’s lack of “home rule.” The Alabama Constitution of 1901 does not give the county authority to levy its own taxes. Instead, the Legislature must do so.

Collins pointed to Birmingham’s occupational tax as an example of how the county could have done better if it had control of its own destiny.

“They have an occupational tax,” Collins said. “I pay it. If you work in the city, you pay it. And it has never been challenged.”

Commissioner Bobby Humphryes blamed the lawyers for working against them in Montgomery to get the occupational tax reinstated legally.

“They caused this problem and they’re still going to benefit from this,” Humphryes said. “That just gripes my behind.”

Circuit Judge David Rains will set the rate for the attorneys’ fees. Most Jefferson County taxpayers will receive less than $100.

The meeting Tuesday morning gave commissioners a momentary reprieve from Judge Rains’ gag order. The court lifted the order temporarily for the commissioners to be able to deliberate.