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Mayor takes $90,000 pay cut to help struggling Mississippi city

By April Williams, CNN
Biloxi, Mississippi, Mayor A.J. Holloway will earn $27,000 a year after his own pay cut.
Biloxi, Mississippi, Mayor A.J. Holloway will earn $27,000 a year after his own pay cut.
  • The cut is 80 percent of the mayor's pay
  • "I just thought it was the right thing to do," A.J. Holloway says
  • The city of Biloxi, Mississippi, is struggling financially

(CNN) -- The city of Biloxi, Mississippi, is in a financial rut. Its sales and gaming taxes have been sliding for two years. So the mayor is voluntarily taking a $90,000 pay cut and will supplement his income with retirement money.

"I just thought it was the right thing to do," said Mayor A.J. Holloway, who will earn $27,000 a year after the cut.

The nationwide economic gloom has affected Biloxi, which was a tourist hot spot before Hurricane Katrina ripped waterfront properties apart in 2005.

"We lost a lot of our businesses along Highway 90," Holloway said.

Many of those businesses decided not to rebuild along the scenic "Beach Boulevard" and relocated to other cities, far from the threat of a storm surge. The moves left the town struggling economically.

Holloway announced Monday that he planned to introduce the pay cut during his budget presentation at Tuesday's city council meeting.

Holloway proposed other ideas to reduce the budget, including new taxes. The city pays 100 percent of its employees' health benefits, in addition to coverage for dependents. The mayor suggested having the employees foot part of the bill for dependents.

City council officials voted against both ideas.

The city took out a loan with a $6 million line of credit just to meet payrolls. Biloxi subsidizes a regional airport about $115,000 a year, but can no longer do that. The same goes for various health agencies and nonprofits.

Holloway said he will likely have to order furloughs for city employees.

Meanwhile, the mayor is willing to put his money where his mouth is with an 80 percent pay cut that will free up thousands for the city budget. The city council is reviewing the budget proposals this month.

If the budget is approved, he plans to keep his old schedule despite the new pay.

"Frankly, I enjoy the work," Holloway said. "And we have a great deal more to accomplish. I could go for another six to eight years."

And, the mayor says, the pay cut is not part of a re-election strategy.

"I'm in my second year of my fifth term, so I have nearly three more years before I would be running for re-election," he said.

Despite the gloomy economic outlook, there are a few bright spots for Biloxi. The city was not affected by the oil spill that left millions of barrels of crude gushing into the Gulf of Mexico.


We got some tar patties and some tar balls in spots," Holloway said.

But Biloxi never had to close its beaches.