Bennett v. Jefferson CountyAnnotate this Case
Jefferson County and the Jefferson County Commission (collectively "the County parties") appealed a circuit court judgment denying a petition for validation of the warrants filed by the County parties, pursuant to section 6-6-750 et seq., Ala. Code 1975, and opposed by the taxpayers and citizens of Jefferson County. Andrew Bennett, Mary Moore, John Rogers, and William Muhammad cross-appealed the portion of the trial court's judgment declining to address alternative arguments they raised. In 2004 and 2005, Jefferson County issued warrants to raise funds to make certain grants to local boards of education to construct school buildings and to retire other debt. All the revenue from Jefferson County's existing 1% education sales and use taxes levied under section 40-12-4, Ala. Code 1975, was pledged and required to pay the debt service on the outstanding warrants and certain related costs. Jefferson County experienced severe financial difficulties in recent years that eventually resulted in the County's filing a petition in bankruptcy. In 2009, the Alabama Supreme Court held that Jefferson County's occupational tax, imposed since 1987, was unconstitutional. In 2015, Jefferson County and its legislative delegation proposed local legislation in an effort to bolster the County's finances without an occupational tax. Jefferson County proposed a new 1% sales tax and a 1% use tax to replace its existing 1% education sales and use taxes, the purpose of which was to fund new warrants at lower interest rate and a lower required debt service that would allow the County to retire its existing warrants. In 2015, Bennett, Moore, Rogers, and Muhammad ("the class plaintiffs") filed a class action against Jefferson County challenging the constitutionality of Act No. 2015-226 which enacted the new Jefferson County sales and use taxes. The circuit court declared Act 2015-226 unconstitutional, and the County parties appealed. Finding that the circuit court erred in finding the Act unconstitutional, and finding no merit in the alternative grounds on which the taxpayers argued the Act was unconstitutional, the Supreme Court reversed (Case No. 1150326) and dismissed (Case No. 1150327).