(The Center Square) – Government operations in North Carolina using only rainy day funds would last 41.5 days, says analysis by the Pew Research Center.
The insight said the funds are 11.4% of $3.61 billion in spending. The total days is a decrease of 17.8, fifth most from the previous year. Pew said in October the balance was $3.62 billion.
Additionally, first-term Republican state Treasurer Brad Briner told the Carolina Journal the state has $3.7 billion more in other reserves to make for $7.3 billion in reserved cash.
North Carolina in 2024 dipped into reserves when Hurricane Helene’s remnants hit the western part of the state, causing 108 deaths and damage estimated at $60 billion to $80 billion. The budget negotiations this year have included restoring what was used from the rainy day fund.
The state, still without its budget due July 1, is operating on the last two-year spending plan of $60.7 billion albeit with some adjustments through education and Hurricane Helene relief appropriations.
At the 2010 midterms, Republicans won majorities in both chambers of the General Assembly for the first time in 140 years and started enacting legislation to change the budget deficit that ranged between $800 million and $1.2 billion. In less than 15 years, the turnaround was roughly $6 billion to a surplus of $5 billion prior to Hurricane Helene last fall.
North Carolina’s 41.5 days is below the median of 46.9 days, and a great distance from Wyoming’s 320.2 days and zero for New Jersey, writes Justin Theal and Paige Forrest for The Pew Charitable Trusts Fiscal 50 project. They say reserves and balances are pivotal for states to “manage budgetary uncertainty, including revenue forecasting errors, budget gaps during economic downturns, and other unforeseen emergencies, such as natural disasters.”
Financial cushion, Pew says, “can soften the need for spending cuts or tax increases when states need to balance their budgets in response to temporary shocks, though these actions can be necessary to address longer-term structural imbalances.”
Financial stability impacts credit ratings, and North Carolina is one of 14 states with AAA in each of the big three lenders.
Among border states, Georgia government operations could run for 51.4 days on rainy day funds, Virginia 47.4, South Carolina 38.5 and Tennessee 33.8.
Pew Charitable Trusts is known as a nongovernment organization working on public policy and informing the public.
