Mayor’s $240 Million ‘Tuscaloosa First’ 2026 Budget Focuses on Public Safety

Mayor Walt Maddox has presented his proposed budgets for Fiscal Year 2026, including an almost $210 million General Fund and another $31 million for his Elevate Tuscaloosa plan.

The city faces daunting financial challenges, including converting all police and fire employees to Retirement Systems of Alabama plans and planning around revenue losses caused by how Alabama distributes internet sales tax revenue. Still, the city's financial strength is reflected in its best-in-class credit ratings, and the mayor's proposal makes almost no cuts to city departments and the agencies that rely on municipal money to function.

"I challenged our accounting and finance team to look under the sofa cushions and find every available bit of change that we can at the city of Tuscaloosa," Maddox told reporters Tuesday morning. "To their credit, they did - we've been able to plug in some funding sources that may seem small overall in terms of a $239 million budget, but if you're able to piece enough of those together, they can help sustain you."

About 40 percent of the budget - almost $83 million - is set aside for public safety salaries and initiatives at the police and fire departments.

It also includes raises for all employees - about 5 percent for public safety employees in the police and fire departments, and about 4.5 percent for all other city staff.

One major issue - sales tax revenue, on which cities rely heavily, has become "anemic," Maddox said. His proposal projects collecting $47.6 million in sales taxes in Fiscal 2026, which is only $400,000 more than in 2025.

"You look around and see all this growth, you would go 'Sales tax has to be just popping!' Well, it's not," Maddox said. "Because we know that people buy increasingly on the internet, and we know data shows that 100 percent of retail purchases in 2000 were brick-and-mortar, today that's only 83 percent. So 17 percent of the goods and services people use are now on the internet, and we get pennies on the dollar for that. We can't sustain what we do at the city of Tuscaloosa without the revenue that we've earned."

That's why the city has filed a lawsuit against the state of Alabama, challenging how the Simplified Sellers Use Tax - that precious internet sales tax revenue - is distributed. Although the city will receive $9.3 million from the system next year, Maddox said that doesn't offset the over $15 million that the city "loses" to SSUT.

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The mayor said he's proud of his team for the proposal, which anyone can review at www.tuscaloosa.com/26budget.

Maddox said all city departments and all agencies will receive level funding from the 2025 budget, with no cuts to anyone except the Tuscaloosa County Park & Recreation Authority.

Maddox said the city will reduce PARA's funding by $239,113 because Tuscaloosa has taken over the operations of six parks that were once PARA facilities and will no longer pay the agency for their maintenance.

The budget also takes another $306,000 from the PARA budget and reassigns it to the Arts Council, which had previously received its funding under the larger PARA umbrella. The city will, however, give a special appropriation of $290,974 to PARA for the now-being-expanded Tuscaloosa Tennis Center, which is expected to reopen late this year.

One dark cloud in the budget proposal is a somewhat sharp increase in the health insurance premiums paid by city employees who are covered by municipal policies. Those costs are expected to rise by 8.3 percent, though Maddox said that was negotiated with Blue Cross Blue Shield, down from an original 11 percent hike.

Citizens can also expect to pay more for both water and garbage services. The cart rate will increase by $1 a month for residential customers and $2 per month for commercial customers, and water bills are expected to climb by about $8 a month for the average consumer.

Even though they are increasing, Maddox said garbage fees are partly subsidized by $5 million pulled from the Elevate Tuscaloosa budget, and citizens still pay about $300 a year less than the actual cost to provide environmental services.

The $31 million 2026 Elevate Tuscaloosa budget is funded by the 1-cent direct sales tax increase the city council passed in 2019. Much of that money will go to already announced projects and initiatives. $9.5 million is budgeted for debt service on existing obligations, $6.6 million is budgeted for construction expenses at the Saban Center, $4.4 million for public safety salaries, and another $5 million for the garbage subsidy.

Facing the two-headed monster of SSUT revenue shortages and the public safety RSA conversion backed up by uncertainty around the scope and length of President Donald Trump's various tariffs, Maddox said the city, like many private developers, is in something of a holding pattern.

"Everything that was planned, that was in place, we're rolling with," Maddox said. "Everything kind of in the future, we're pausing on a little bit."

He did note that Elevate projects continue to draw matching grant funds and private donations. Those partnerships have contributed over $116 million in a nearly dollar-for-dollar match to taxpayer dollars collected by the tax, Maddox said.

The tax plan also continues to fund education initiatives like almost universal Pre-K to prepare our youngest students to succeed and dual enrollment plans that can save parents thousands of dollars in tuition at the University of Alabama, Stillman College, and Shelton State.

The city council will now hold a series of hearings to debate the merits of the budget, and has been asked to vote on whether to adopt it by September 23rd.

For more coverage of the budget process and other news from City Hall, stay connected to the Tuscaloosa Thread.