Here's a question for North Carolina's leaders: If what our state is experiencing right now isn't a "Rainy Day," pray tell what is? Our State Controller just reported our state has $4.38 billion in unallocated funds stored up and that surplus is growing by millions of dollars each month. This amount doesn't even include the $1.1 Billion Rainy Day Fund set aside for emergencies. The true total is almost $5.5 billion.
Two questions immediately surface. First, how did our state accumulate so much money? But more importantly, why haven't we put it to work?
Let's begin by giving compliments to our legislature's financial prudence in stashing away reserves for the aforementioned rainy day. But a large reason for the huge accumulation is because our Governor and our legislature were never able to agree on a state budget in 2019, so we are essentially operating with the 2018 state budget. Tax revenues exceed those projected in that year and North Carolina finds itself in the enviable position of big surpluses.
So why we haven't we been spending it during this unprecedented crisis? We understand why there was some reluctance in the spring and early summer, when there was uncertainty over our economy and nobody could accurately predict how the pandemic would affect state budgets. There was some expectation we might need large sums to offset major budget holes. Additionally, was the anticipation that the federal government would pass a third relief package and North Carolina didn't want to duplicate federal efforts.
By mid-summer it was clear the economy hadn't crashed, the state budget was in decent shape, the feds weren't coming through (and weren't likely to) and cash balances were growing every month. There was no longer a reason to delay in helping people in need.
Reports estimate some 250,000 residents in our state have lost their job-related hospitalization insurance. Many who lost their jobs had hung on by a thread with the state unemployment benefits and the $600 per week benefit from the federal government, which ended in July. The president's executive order reduced the benefit to $300, but it ran out of money the first week in September. Now some 100,000 are estimated to face eviction in January, when the moratorium expires, because they cannot pay their rent or mortgage. Feeding America says that 1 in 5 North Carolinians (20%) are experiencing
food insecurity. And let's not forget the thousands of small businesses who closed or threatened, or the many small local governments that are struggling to pay their bills.
Francis Bacon, the 16th Century English Philosopher and Lord Chancellor of England, could have been speaking to our current situation when he said, "Money is like manure, it's only good if you spread it around."
Why isn't North Carolina spreading money around to ease the pain?
Lawmakers say they will address these pressing problems when they come back into session mid-January. Obviously, none of them are unemployed, bereft of health insurance, face losing their homes or are hungry. People can't wait 'til January 13th, when the legislature convenes. The lack of action by our leaders is unconscionable.
We call on Governor Cooper to call the legislature back into special session on December 28th and immediately start appropriating a good portion of this huge surplus to help people and small businesses. We don't advocate throwing money away foolishly, but it shouldn't be difficult figuring who needs help and where to put the dollars. The need is clear. The money is available. Spend it NOW!
Tom Campbell is former assistant North Carolina State Treasurer and is creator/host of NC SPIN
, a weekly statewide television discussion of NC issues that airs on UNC-TV main channel Fridays at 7:30pm, Sundays 12:30pm and UNC North Carolina Channel Fridays at 10:00pm, Saturdays at 4:00pm and Sundays at 10:00am
. Contact Tom at NC Spin.