Birmingham Proposed Budget Addresses $63 Million Shortfall

BIRMINGHAM, AL — As the COVID-19 pandemic continues, the City of Birmingham looks forward to the new fiscal year's budget, which will need to address $63 million in lost business tax revenue due to the pandemic. The new budget was proposed Tuesday, which includes numerous cuts in salaries and citywide positions.

The city is announcing furloughs for 114 part-time employees and 259 full-time employees who cannot currently perform their normal work functions because their facilities are closed during the pandemic. The furloughs represent 7 percent of the city’s workforce.

The length of time of the furloughs is indefinite, and those furloughed will still be able to receive their benefits of health insurance for three months.

Mayor Randall Woodfin will reduce his salary by 10 percent under the proposed budget. All employees appointed by the mayor will have salaries reduced by 3 percent to 10 percent. The city will also suspend nine paid holidays this fiscal year for all employees.

The proposed budget defunds 447 vacant positions. Removing these vacant positions from the operating budget alone will save $15.8 million.

As well, the budget reduces funding to various non-city boards and agencies by $12.6 million, reduces funding for economic incentives by $1.7 million and find savings in debt restructure by $3.8 million. Under the plan, the city would transfer $23 million from its budget surplus to make up the remaining shortfall.

"These are difficult choices to make. Our employees are our greatest asset and we are thankful for their service," Woodfin said. "But we must remember our duty is to the people who make up the 99 neighborhoods of Birmingham. These actions ensure no reductions take place in the basic services the city provides to the people."

The budget’s spending priorities reflect a commitment to investment in neighborhoods, infrastructure and financial sustainability.

The budget proposal maintains funding for neighborhood revitalization, including $10 million for street resurfacing, $3.5 million for demolition and $1.25 million for weed abatement.

The plan also continues key initiatives such as the Birmingham Promise, which in its inaugural year will send more than 700 Birmingham City Schools students to college.

Also continued will be Birmingham On Demand (VIA) and the City Haul recycling pilot project. The budget also prioritizes a deferred maintenance program for city facilities and an investment in the city’s fleet.

The proposed operating budget increases the city’s contribution by $3.8 million to the pension fund for a total contribution of $28.4 million.