Budget deficit could increase to $36.5M - Action News 5 - Memphis, Tennessee

Budget deficit could increase to $36.5M

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(WMC-TV) - Memphis City Hall sources say a hiccup involving the city's latest debt refinancing transaction could lead to a higher budget deficit.

Under the current tax rate, the city faces a $26.5 million deficit. City hall sources say external factors could cause that deficit to increase to $36.5 million instead.

This increase to the deficit could be the result of factors such as the weak stock market, which could cause the debt refinancing transaction the city is currently working on to yield $10 million less than originally calculated.

Chief Administrative Officer George Little responded by saying, "Due to recent changes in the markets, the bond refinancing deal is less attractive 'today'. However, we are not proceeding with the transaction today. Hopefully, the markets will settle and more favorable conditions will prevail quickly."

Action News 5's Kontji Anthony is inside a special called meeting by the Memphis City Council to vote on the tax rate and budget. She will have the latest in a live update at 6 p.m.

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