Rebuilding Mississippi: Budget shortfalls, unemployment woes, closed businesses and money drying up; Mississippi’s economy on the brink of collapse

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Jackson, Miss., (WJTV)- As coronavirus cases in Mississippi continue to grow, so does the possibility of an economic collapse.

“The human cost of another great depression is higher than a benefit of broad orders,” said Governor Tate Reeves during one of his daily news conferences.

Since March when Reeves signed a shelter-in-place order, on average over 45,000 mississippians file for unemployment weekly .

Before the pandemic the Mississippi Department of Employment Security processed around 1,000 claims each week.

“200,000 of our fellow mississippians have filed for unemployment insurance in just the last seven weeks,” Reeves said.

While Mississippi received $1.25 billion in federal COVID-19 relief, the law explicitly says it can not be used to fill budget shortfall.

“Mississippi has about $500 million in its so called rainy day fund and that’s enough to cover about a month worth of lost tax collections,” Jared Walczak, director of state tax policy of the Tax foundation said. “It’s something, it’s good but it’s not nearly enough to deal with the crisis that states are grappling with right now.”

According to the non- partisan Tax Foundation states are looking to lose 15 to 20 percent of revenue— which could lead to workers being furloughed or let go.

“Other states can perhaps re-prioritize some some projects , decide to postpone things for now without creating a lot of immediate harm,” Walczak said. “Mississippi has always been a lower taxed and ultimately a lower spending state, so when it comes to cuts there’s a whole lot of pain involved that’s why the state will certainly be turning to the federal government.”

Projections remain unclear as to what the deficit appropriations will be and due to the suspension of the state legislature Mississippi has yet to have a budget for the next fiscal year.

As states like Mississippi depend on sales tax and income tax which is faltering due to the number unemployed and closed businesses.

“The onset of coronavirus and the shelter in place order during our peak season pretty much was the nail in the coffin,” said Chelsea Pounds, co-owner and manager at Fancy Formals.

Businesses have lost money and some like Pounds have to close their doors.

“We did have to close our business during this time, and all of the income, and the business stopped completely but the bills and overhead did not,” Pounds said.

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