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COVID-19 forces deep cuts in 2020-2021 city budget

CITY HALL – Slammed by COVID-19, St. Louis city officials are looking at making cuts of nearly $40 million in their general fund budget for the 2020-2021 fiscal year starting July 1.

Under a proposal approved by the city’s Board of Estimate and Apportionment on Monday, there is no money for raises, and positions would be eliminated. Millions normally used to pave side streets, install sidewalks and do other capital projects in specific wards would go for citywide capital projects.

But it could be worse, city Budget Director Paul Payne said. 

“We need to be prepared; there’s a lot of uncertainties with revenues right now,” Payne said. “We need to be in a position where we can respond to whatever outcome results.”

Without the revenue drains brought on by the COVID-19 coronavirus, the general fund budget would be $535 million, Payne said. Instead, the general fund budget proposal is $495 million, a 4.7 percent decrease from the 2019-2020 budget. It’s part of a total city budget of $1.1 billion, which also includes funds such as those for St. Louis-Lambert International Airport and the city Water Division.  

A budget bill will be introduced in the board on May 8. After that, the Board of Aldermen’s Ways and Means Committee will hold hearings on the budget. If the board wants to make increases in one area, it would have to make decreases in another.

The whole board will vote on it and send it back to the Board of Estimate and Apportionment for final approval. The mayor must sign the budget bill before July 1, when the new fiscal year begins.

The $40 million in reductions in the general fund budget proposal includes $9.9 million in direct budget cuts. The largest part would be slashes to the Department of Corrections, particularly the Medium Security Institution (also called the Workhouse).

Last year, the Board of Aldermen passed a bill basically boosting the merit salary increase of  city employees to 3 percent from 1.5 percent. But there’s no money in the budget for any raises. And 88 positions would be eliminated from the general fund budget. 

The budget also would divert $7.5 million from a fund for capital improvements in wards, for such things as alley repairs and new street trees, and use them for citywide capital projects.  Also, recreation centers would not get money for improvements. 

According to a budget document, COVID-19 has devastated revenues. Before the disease came in full force, earnings and payroll tax receipts had increased about 7 percent. Sales tax receipts had been up 1.1 percent.  

The reserve had passed the minimum target of 5 percent of budget in the 2019-2020 fiscal year. As the city kept contributing to the reserve, it was close to reaching the goal of having a reserve equal to 10 percent of the general fund budget. 

A budget document says possible additional cuts if things get worse include reductions in the recreation and refuse divisions and eliminating the subsidy for Operation Brightside. There could be layoffs or furloughs or reductions in building demolition. 

In a final step before sending the budget to the Board of Aldermen, the Board of Estimate and Apportionment voted to take $1 million from its fund balance and put it in the Affordable Housing Trust Fund, bringing the total up to $6 million. 

The budget calls for 6,607 total employees in all categories, down 340 over 10 years.

Jim Merkel Born and raised in the St. Louis area, Jim Merkel covered communities throughout the area from 1991 to 2013 for the old Suburban Journals of Greater St. Louis. He is the author of five books about the Gateway City published by Reedy Press. The latest is Growing Up St. Louis: Looking Back Through the Decades. He and his wife, Lorraine, live in the Bevo Mill neighborhood of south St. Louis with Miss Jenny the Cat. For more about Jim, visit

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