Birmingham budget shortfall because of COVID-19: Mayor and others to take pay cut, some folks furloughed

$62M shortfall for B'ham budget

BIRMINGHAM, Ala. (WBRC) - Birmingham Mayor Randall Woodfin said he will take a pay cut to help soften the major impact from COVID-19 on the city’s budget.

The city is looking at a $62.7 million dollar shortfall because of a drop in various taxes due to COVID-19.

Last year’s budget was $459 million this year’s budget will be $412 million.

Mayor Woodfin said he will take a ten percent cut in salary and all of his appointed staff will take a 3 percent to ten percent cut.

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% of the city’s workforce. The length of time of the furloughs is indefinite at this time. Those furloughed will still be able to receive their benefits of health insurance for three months.

Pension contributions will not be made for employees during furlough.

Other changes include no merit or cost of living raises, and no paid holidays for nine of 12 holidays the city offers.

Woodfin said the city will still need to go into the reserve fund in order to balance the budget.

In order to make up the reduction in tax revenue, 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.

Regular city services, like paving and revitalization will be met.

The police department budget will grow from $93 million to $104 but this will include taking in security officers from other city departments. Overtime pay will be cut from $11 to $7 million.

Mayor Woodfin said the bottom line, he and city leaders are making an effort not to terminate any city workers.

“These are difficult choices to make. Our employees are our greatest asset and we are thankful for their service,” Mayor 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.”

Open jobs for police and public works will not be filled right now.

The plan also continues key initiatives such as the Birmingham Promise, 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.

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