Commissioner: Financially recovering from COVID-19 economic crisis could take years

Posted at 8:46 PM, May 28, 2020
and last updated 2020-05-28 22:46:40-04

NASHVILLE, Tenn. (WTVF) — The commissioner of finance for the state of Tennessee says recovering from the financial losses caused by the coronavirus shutdown could take years.

Commissioner Butch Eley said economists he's spoken with say the financial crisis from this spring could last two years or more.

The news was reported to a room of state senators who were taking a look at the state's finances for the first time in committee since the shutdown in March.

Eley said hundreds of millions of dollars are projected in losses in sales tax revenue, and the growth rate in April in the state was -45%.

Eley recommended reduced spending and a freeze on hiring in fiscal year 2020. In 2021, he believed it was important to make more deductions to the overall state budget.

The state has received $2.65 billion in stimulus from the federal government to directly help with fighting COVID-19 and the recovery from the pandemic.

Eley said the money has to be used in those two areas. One lawmaker asked what would happen if the money wasn't used by its end of the year deadline.

"We know that we can find ways to spend these dollars that are helpful for our state and it's just a matter of being prudent and deliberate in making sure that we spend this wisely and as well as possible for our taxpayers," said Eley. "I can't imagine a situation where we will not spend all of the dollars."

The state house of representatives is trying to cut one billion dollars from the budget. They hope to be done within the next three weeks.