July 21 (Bloomberg) -- Jefferson County, Alabama, the state’s most-populous county, will run out of money and plans on Aug. 1 to put as many as 1,200 employees on unpaid leave, the president of the county commission said.

The six-week furlough of more than one-third of the county’s workforce will allow enough time for the Legislature or the state Supreme Court to reinstate an occupational tax that was struck down on constitutional grounds, commission president Bettye Fine Collins said today.

Jefferson County, home to Birmingham, has been teetering on the brink of bankruptcy since last year when interest rates on $3 billion of the county’s sewer debt soared as high as 10 percent amid Wall Street’s credit crunch. The crisis intensified in June when a circuit court prohibited the county from spending the $75 million annually generated by the tax.

To contact the reporter on this story: Kathleen Edwards in Birmingham, Alabama, at .

Last Updated: July 21, 2009 19:30 EDT