Dr. Steve Morse makes presentation in Sevier County on Fiscal Cliff and the impact it will have on the economy. (Source: Kyle Grainger, WVLT)
PIGEON FORGE, Tenn. (WVLT) -- Tennessee economists watching the fiscal cliff say it could have a major impact on each of us in Tennessee.
Economists say three things will happen on January 1st unless congress does something. They say there will be a tax increase on everyone of 2%, more parts of the healthcare act will go into place, and the federal government will cut spending.
Dr. Steve Morse, an economist with the University of Tennessee, says that means the average visitor to Sevier County will bring home $2150 less per year. He says for many families that could mean they cut their vacation, or spend less while on vacation.
"Not only for the nation as a whole, but for places like Sevier County that depend heavily on people spending money for family vacations. When families have less money it could be a double whammy for that economy," said Morse.
He says families in Sevier County will bring home less money, but they may have to deal with fewer jobs or less hours. With the people who visit not making as much, and cutting back on a family vacations, that could mean fewer jobs available here.
Morse says another impact locally will be on federal spending. He says cuts in spending will impact the national park, a major reason that people visit east Tennessee.
"It's designed to decrease the federal deficit. So federal spending will go down by law automatically," said Morse.
Morse says the ripple effect will become a burden on families for years to come.
Adam Bailey is a college student who's recently married, and has a 1 year old son. He says the $80 a paycheck could mean changes to his family's budget
"You have to use it for other things, you have to use it for rent, for mortgage, food, everything like that," said Bailey. "$80 turns into 160 real fast, I mean that's cell phone bills, cable, it's a lot of things and when it adds up over the year, that's a vacation."
Theresa Leveritt says it could mean lifestyle changes for people.
"Tightening up on the budget, doing less shopping, doing less buying, doing less traveling."
The Fiscal Cliff, as it's called by economists, is scheduled to happen January 1. Congress has the option of doing nothing, make individual changes, or come up with new plans all together.
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