A judge’s ruling that the Jefferson County occupational tax is unconstitutional could sap more than $70 million of county revenue and endanger the jobs of county workers weeks before Christmas.
In the latest event in the occupational tax saga, Montgomery County Circuit Judge Charles Price ruled Wednesday that the tax passed by the Alabama Legislature in a 2009 special session was unconstitutional.
Plaintiffs had argued that the bill passed by the Alabama Legislature was not similar enough to the bill advertised as the session began. The Legislature amended the advertised bill so substantially that it, in effect, became a different bill, the judge ruled Wednesday.
Prior to today’s ruling Jefferson County officials have predicted it would be appealed to the Alabama Supreme Court regardless of which side prevailed in circuit court. The ruling effectively suspends at least $70 million of annual tax collections.
However, Judge Price did not make his ruling retroactive and refused the plaintiffs request for a refund of collected occupational taxes.
In 2009, when a previous version of the tax was found unconstitutional, the county furloughed employees and county services, such as license tag renewals, slowed to a crawl. Satellite courthouses were shuttered and lines for licence renewals stretched out of the courthouse doors and into Linn Park.
In reaction to that crisis, the Alabama Legislature passed the current version of the tax. That version extended the tax through next year, when a county referendum would have decided whether to make the tax permanent or phase it out over four years.
County officials have known for months that today’s ruling could scuttle the tax. Earlier this year the out-going county commission prepared two county budgets — one which included the tax collections and a second which excluded those collections. The second budget called for permanent reductions in force.