Birmingham budget in an $18.2 million shortfall due to COVID-19 pandemic

Local News

BIRMINGHAM, Ala (WIAT) — In a special-called Birmingham budget and finance committee meeting Tuesday, Mayor Randall Woodfin revealed the financial crisis the city’s budget was facing.

Lester Smith, director of finance for the city, said Birmingham is projected to lose $18.2 million in revenue for the 2020 fiscal year budget, mostly as a result of the coronavirus pandemic. That represents a 20% decrease in revenue.

Smith also revealed that the 2021 fiscal year budget could see as much as $73 million loss in revenue if the city continues to see a 20% decrease in revenue.

City officials say 70% of the budget goes towards city employees salaries and benefits. Jobs could be at risk as well as city operations, which affects everyone who works and lives in Birmingham.

Councilor Valerie Abbott, who serves chair of the budget and finance committee, said there are going to have to be cuts, which means a lot of pain for everyone.

“It’s like everything is interconnected with each other and if you don’t have a job, you’re not going to spend money therefore businesses aren’t going to do well, therefore the city isn’t going to do well. Therefore the city may not be able to pay its employees as well as it has before so it’s this vicious cycle,” Abbott said.

Woodfin said that when it comes to budget cuts, everything is on the table.

“Anything we have to cut or can’t even maintain is a painful one. We will start having those discussions with you all in month of July,” Woodfin said.

Abbott said this is a frightening time for the city and hasn’t seen anything like this in her 19 years on the council.

“We know we’re going to have to make cuts, cuts in city services, cuts all the way around even people’s salaries so they won’t be taking home as much but maybe they’ll have a job which is better than losing your job completely. No one has a crystal ball,” she said.

The 2020 fiscal year budget will end on June 30. Abbott said she expects the current budget to be extended until a 2021 fiscal year budget is presented and approved.


Copyright 2021 Nexstar Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.