Proposed 2021 budget includes reductions due to COVID-19, continues commitment to neighborhood revitalization

August 18, 2020 – Mayor Randall L. Woodfin presented a 2021 Operating Budget proposal to the Birmingham City Council today, and it supports basic services and continues key initiatives while addressing a $63 million shortfall in business tax revenue due to the COVID-19 pandemic.

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.

Mayor Woodfin will reduce his salary by 10%. All employees appointed by the mayor will have salaries reduced by 3% to 10%. The city will also suspend 9 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.

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.

“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.”

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, 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. In a two-year period, the city has increased its contribution by 70%. That results in a 90% funding of the actuarially determined contribution. This is important because it shows a significant and sustained improvement in pension funding which is a key factor in the city’s credit rating.

Mayor Woodfin will hold a tele town hall to discuss the budget proposal with residents tonight at 6 p.m. Information about the budget and the tele town hall can be found at www.birminghamal.gov/2021budget.

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