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Pandemic-singed budgets reflect grim times for city, county

It’s budget season in Memphis and Shelby County, and for the first time ever, both city and county mayors are making financial plans amid a global pandemic that is negatively impacting their budgets.

This week, Mayor Jim Strickland and Shelby County Mayor Lee Harris, both presented grim financial outlooks that could result in the loss of jobs and services.

Mayor Jim Strickland. (Photo: Karanja A. Ajanaku)

During a virtual Memphis City Council meeting Tuesday, Strickland presented tentative budget options, holding off on a formal budget until he gathers additional information regarding federal assistance.

Pointing out that this will be the “tightest budget we’ve seen” since he’s been mayor, Strickland projected the city losing more than $80 million in revenue in the new fiscal year, that starts July 1. There is a loss of another $23 million for the current budget cycle that ends June 30. Strickland attributed the deficits to loss of sales tax and other revenues, impacted by COVID-19 safer-at-home mandates and other virus-related factors.

“We must shift from the conventional ways of thinking about our budget and embrace a whole new set of norms,” Strickland told council members. “Not all of our services and programs will survive this budget.”

The mayor hops for some financial relief from the federal government’s CARES Act. Last month, Congress passed the assistance fund that provided $150 billion to help cities and states hit by the COVID-19 pandemic.

Strickland said the city expects “tens of millions” from the program, but he’s unsure if it will be enough or how federal officials will allow the money to be spent.

His concern is that the city will continue losing money due to the lack of tourism, even after the economy opens back up.

“There are some experts who say things may not get back to normal until there’s a vaccine. Well, that may not happen until 2021,” Strickland said.

“So, are tourists going to come from Europe flocking to Graceland, are people going to do the riverboat cruises? We have 12 million visitors a year filling our hotels and our restaurants. We don’t know how much that’s going to be back.”

The news stunned City Council members, who refrained from asking a host of questions after the presentation.

“I’m sure my colleagues will have plenty of questions. We’re just kind of in shock right now,” council Chairwoman Patrice Robinson said. “Give us a little while to digest this information and please make yourself available so that we can ask the questions we need to ask. We know that we’re going to get through this successfully together.”

Strickland said he hopes to present a formal budget at the next council meeting, scheduled for May 5. He also said if the CARES Act is not helpful and the city has to cover the loss in tax revenues without federal or state aid, he will propose a Continuation Budget for July and possibly August.

Later, he will come back to the council to present an amended proposed budget for the entire 2021 fiscal year.

View from the county

Shelby Mayor Lee Harris’ budget provided a similar bleak outlook. The county mayor virtually presented his $1.4 billion budget to county commissioners Monday.

Shelby County Mayor Lee Harris

Harris admitted the budget will be tight, but he’s hoping to prevent layoffs.

“Make no mistake,” Harris said. “This is a tough budget year. But I believe we have a real chance to make it through this year without layoffs and with the ability to make strategic investments, fully fund our schools, and continue our work of advancing the public interest.”

In the budget, Harris’ administration allocated $8.5 billion to Pre-K and early Pre-K. The mayor said schools will not take a hit, allocating $427 million and an additional $33 million for school construction.

Another $4 million in new resources will be made available for Shelby County Sheriff’s Office, along with funding for 30 new patrolman positions.

There also is a special COVID-19 relief fund for families hit hard by the pandemic.

While Harris called for no property tax increase, he instead insisted on a $16.50 increase in car registration fees, also known as a wheel tax. He noted that the increase would only happen once the economy opens back up.

“The goal here is to make sure no one is hit with new taxes and new fees while the economy slows down, and job losses continue to mount,” Harris said.

The county commission will begin reviewing Harris’ budget during the next several commission meetings, with plans to vote before the July 1 fiscal year begins.

 

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