MEMPHIS, Tenn. (WMC) - The health care system in the area is not the only thing feeling the strain from COVID-19. Local governments are expecting tight budgets this season.
Shelby County Commissioners Monday night did not approve emergency spending cuts for county agencies that had been proposed by Shelby County Mayor Lee Harris as a first-step of belt-tightening.
“We are going to have to figure out how we make things balance,” said Harris in a Tuesday media briefing. “We’ll have to go back to the county commission with cuts along those lines or even more serious cuts, because that’s the only way we’re going to deal with the economic out look right now.”
Harris said commissioners will have to make spending cuts somewhere to cope with a looming budget shortfall. With courts and clerks offices closed, there’s minimal fee collection occurring. With job losses in the community, property tax collection isn’t guaranteed either.
Harris asked other elected county officials like clerks, the trustee, register of deeds and assessor to trim 2 to 2.5%for the next three months. The first round of spending reductions was aimed at saving approximately $8 million to $10 million.
The officials opposed the cuts in appeals to commissioners, and the body in a 6-6 vote did not allow them to happen. A compromise amendment by Shelby County Commission Chairman Mark Billingsley that would approve the spending cuts but guarantee no layoffs or changes to contracts for 90 days was also defeated.
Harris said Tuesday after the vote he anticipates multiple phases of reductions to be proposed as COVID-19′s impact on the county’s bottom line becomes more clear. The decisions will not get easier, he indicated.
“Our inability to cut from the current budget is going to make the new budget even more dire,” said Mark Billingsley, Shelby County Commission chairman. “I do think we will probably see layoffs from county government.”
The elected officials expressed concern about cutting from already approved budgets and said customer service in their offices would suffer. Many agencies like the Shelby County Assessor and Shelby County Clerk’s offices have told county commissioners and Harris they are already woefully underfunded.
Another chief issue the officials had with the spending cuts was the timing. Shelby County Clerk Wanda Halbert said Tuesday they were approached last minute by the mayor’s administration and did not have enough time to thoroughly prepare and review their budgets.
Halbert also said Shelby County is expected to get money from the state of Tennessee for COVID-19 relief, and the cuts may be premature.
“Every independent office has expressed a desire to support and help the administration,” said Halbert. “We need to know exactly what the problem is and in what way can we cut, as well as making sure at the same time we can adequately serve the public.”
County government is not the only government dealing with financial issues because of COVID-19. Municipal governments rely on sales tax revenue collected. Sales tax is down because of required store and restaurant dining room closures.
In the City of Memphis, sales tax revenue accounts for approximately 20% of the city budget. Memphis Mayor Jim Strickland is expected to present his budget in late April.