Birmingham Mayor reduces salary as part of the city's COVID economic recovery plan

Birmingham's proposed 2021 budget includes reductions due to COVID-19, continues commitment to neighborhood revitalization

Birmingham, Ala. – Mayor Randall Woodfin presented a 2021 Operating Budget proposal to the Birmingham City Council yesterday that supports basic services and key initiatives, while addressing a $63 million shortfall in business tax revenue due to the COVID-19 pandemic.

The city announced 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. While the length of the furloughs is indefinite at this time, furloughed employees will still be able to receive their benefits of health insurance for three months. “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.” Mayor Woodfin also announced his plan to reduce his own salary by 10 percent. Additionally, all employees appointed by the mayor will have salaries reduced by 3 to 10 percent. The city will also suspend 9 paid holidays this fiscal year for all employees. The proposed budget also defunds 447 vacant positions, which is projected to save the operating budget $15.8 million. In order to make up the loss tax revenue due to the pandemic, 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 finds additional savings by way 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. The budget’s spending priorities reflect Mayor Woodfin's outspoken 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. It 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 percent, resulting in 90 percent funding of the actuarially determined contribution. The city is touting this as significant and sustained improvement in its pension funding program, which is a key factor in the city’s credit rating. Additional information about the budget can be found at www.birminghamal.gov/2021budget.