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Memphis could be looking at a deficit of more than $100 million for budget

Local 24 News' Mike Matthews spoke to a local economist about how the coronavirus outbreak is affecting the city's finances.

MEMPHIS, Tenn. — The weather matched the Memphis budget. Gloomy - possibly stormy. A rain that would chill your soul as if it were a bottle of champagne. Or a Bud Light.

Memphis Mayor Jim Strickland says when it comes to a budget, he needs more time. A couple of weeks would be dandy, he says.

The coronavirus pandemic and the quarantine has resulted in a drop - a big drop - in money coming into governments. Combine the remaining weeks of this year’s budget, and the new one starting on July 1st, and you’re looking at a deficit of more than $100-million.

“The budget problems will get worse if coronavirus continues to be a problem,” says noted economist Dr. John Gnuschke. “Opening up the economy will be a partial solution to the Mayor’s budget problems.”

Mayor Strickland is hoping to get a major league pile of money from a federal program designed to help cities. If it doesn’t happen though, the Mayor says he will present a truly bare bones budget. No new programs, cuts to city service the likes of which haven’t been seen since the Great Depression, and layoffs. Hundreds of city employees could lose their jobs.

Dr. Gnuschke says, “The economic impact will continue to devastate us until we get back to a fully functioning economy.”

It’s going to take time for that to happen.

Meanwhile people continue to die from the coronavirus. There is no vaccine or cure. All of this talk could happen again.

Dr. Gnuschke says this is a battle.

“It’s like a 15-round fight. The pandemic won round one. Politics is winning round two. Economics might win round three, but it is still a 15-round fight.”

As you may have seen yesterday, I extended our Safer at Home Executive Order for an additional two weeks through May 5th. In the extension, we included some additional conditions, as well as, lifted some restrictions. These changes were made with an eye towards the future when we can get back to business.

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