Publisher's note: This post, by Brian Balfour, was originally published in Civitas's online edition.
In late March, I wrote
about how North Carolina state government is likely better financially prepared than most states for the coronavirus shutdown, and certainly more prepared than it was prior to the Great Recession.
The state has a combined $2.7 billion in rainy day and unspent funds to help cover revenue shortfalls, however, that amount would likely be insufficient.
Indeed, late last week House Speaker Tim Moore told reporters
that state budget writers will likely be facing at least a $4 billion budget hole for the coming fiscal year that starts July 1. And that doesn't count the massive shortfall the state budget will be facing the remaining months of the current fiscal year.
While more than a month has passed since I first made the recommendation, it's still not too late to take much needed action. Governor Cooper should replicate Executive Order 21
issued by Gov. Bev Perdue in August 2009 to address the budget shortfalls being faced by state government at that time, and order a five percent reduction in state spending for non-health agency spending.
Doing so would enable the state to save roughly $71.5 million per month by eliminating the most non-essential five percent of spending from each agency.