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Birmingham projects $75M loss in revenue; mayor cites COVID-19

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By Erica Wright
The Birmingham Times

Due to the impact of COVID-19, the city of Birmingham is projected to have a $75 million revenue shortfall and may have to suspend merit pay for city employees, Mayor Randall Woodfin announced on Tuesday.

“Since March, because businesses have had to close, we’ve seen a decrease in occupational taxes and sales taxes, in addition to that, some businesses have closed permanently such as Lucy’s, Urban Standard and Babalu,” said Woodfin. “When all of these things happen, there is a ripple that affects the city of Birmingham. We don’t receive business licenses anymore, we don’t receive occupational and sales taxes, we don’t have events in our city, we don’t receive lodging taxes and that causes a decrease in the funding we bring in.”

Woodfin said the funding for the last two months has been steady at about a 20 percent decrease and if that holds, that will contribute to the projected shortfall.

That shortfall could impact city workers, he said.

“I shared some tough news with employees this morning . . . we have to suspend merit pay, cost of living adjustment and longevity pay,” the mayor said.

Due to the uncertainty of its finances, the city has already postponed its FY 2021 budget to August 20 with the budget going into effect October 1.

According to the Mayor-Council Act, the mayor must present his budget to the council by May 20 each year, before the fiscal year begins July 1.

“Because of the financial constraints we’re in, we have to make this tough decision,” said Woodfin. “That is in exchange for making sure our employees can stay employed as well as continue to provide basic services. I’m confident we will push through this and I’m hoping things maybe change six months from now or even three months from now.

“We exist to provide basic services to our citizens and that has to be done. We hope to not have to cut basic services but when you have a $75 million shortfall, everything is on the table,” he said.

In another matter, the City Council voted to pay the $25,000 fine that was levied against the city following the removal of the Confederate monument in Linn Park.

In 2017, the Alabama Legislature passed a law that protects historical structures, such as monuments or other statues that have been on public property for 40 or more years.

On May 31, protestors gathered in Linn Park for a peaceful demonstration. Efforts were made to remove the 52-foot obelisk, as demonstrators chipped away at the base and even tied ropes to the structure. During the event, Woodfin told supporters he would “finish the job” and remove the monument in a “safe and controlled environment.”

Following this move, Alabama’s Attorney General filed a lawsuit against the city for removing the monument and violating the state law that was passed three years prior. Tuesday’s vote settles that lawsuit and the money will go towards the state’s Historic Preservation Fund.