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Jefferson County, Alabama

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Jefferson County, Alabama
Map of Alabama highlighting Jefferson County
Location in the state of Alabama
Map of the USA highlighting Alabama
Alabama's location in the U.S.
Founded December 13, 1819[1]
Seat Birmingham
Largest City Birmingham
 - Total
 - Land
 - Water

1,124 sq mi (2,911 km²)
1,113 sq mi (2,883 km²)
11 sq mi (28 km²), 1.00%
 - (2000)
 - Density

595/sq mi (230/km²)

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.


Jefferson County was created by the Alabama legislature on December 13, 1819, 42 year before the American Civil War.[1]


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 the 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.[2]


  1. 1.0 1.1 1.2 "ACES-Jefferson". Alabama Cooperative Extension System. Retrieved 2008-05-29.
  2. Corkery, Michael (November 12, 2011). "Blame Flies in Alabama". Wall Street Journal: p. B16.