Economists say it may take years for Tennessee's economy to recover from COVID-19
NASHVILLE, Tenn. (Mike Osborne) -- Gov. Bill Lee has asked state agencies to plan for deep budget cuts as Tennessee prepares for a years-long recovery from the coronavirus crisis.
Economists warned the governor on Wednesday it could be years before business activity and consumer spending in Tennessee return to pre-pandemic levels. They also predicted the state could suffer tax revenue losses during the coming fiscal year ranging anywhere from $588 million to $1.7 billion.
Lee has ordered state departments to plan for possible 12 percent budget cuts in response to the crisis.
Finance Commissioner Butch Eley testified during a State Senate hearing Thursday it may take up to four years for tax revenue to return to pre-crisis levels.
Eley told lawmakers the Lee Administration hopes to avoid debilitating cuts to vital state services during the recovery period by spending Tennessee’s cash-on-hand and reserve funds, by possibly selling bonds to pay for some projects, and by implementing a state government hiring and spending freeze.
State lawmakers will have the final say on any changes to the state budget. They resume their pandemic stalled 2020 legislative session on Monday. The General Assembly is required by law to pass a balanced state budget before adjourning for the year.