Alabama county could hike rates to pay sewer debt: receiver

States lacking the power of the printing press either raise taxes or default. Municipalities trying to stave off poor decision-making during expansion often try to pass tax increases into the teeth of a contraction. That is, until an angry crowd marches to the steps of the capital with pitchforks, drums, and signs suggesting something along the lines of ‘Up Yours!’

Headline: Alabama county could hike rates to pay sewer debt: receiver

BIRMINGHAM, Alabama - Politically unpopular rate hikes could cover the debt service on the $3.14 billion of sewer-system debt that drove Alabama's Jefferson County last year to file the biggest municipal bankruptcy in U.S. history, the system's receiver said on Wednesday. John Young, the receiver who was stripped of his executive authority in January by a bankruptcy judge, testified during a court hearing in Birmingham that rates paid by the county sewer system's customers were below the U.S. average. "Over time, you could certainly service the debt with rate increases," Young said, adding in response to a lawyer's question that "it happens everywhere every day, and it will happen here. This is happening all over the country, and rates have always been raised to cover debt service."

Source: cnbc.com

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