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Floyd experience teaches us to keep rainy day funds accessible

As we edge closer to the 16th anniversary of Hurricane Floyd, it is important to review the vital role that state emergency funds play when disaster strikes. Lawmakers in North Carolina tapped into state “rainy day funds” to help cope with the storm’s aftermath: the cost of providing assistance to families in need and rebuilding destroyed communities. Unfortunately, the North Carolina Senate is seeking to weaken access to our rainy day fund, even in times of true emergency.

Floyd, which hit about a week and a half after Tropical Storm Dennis, caused some Tar Heel families to lose loved ones, jobs, and all of their possessions in drowned cities. The storm caused $6 billion in damage [1] and destroyed entire communities, including homes, farms, and businesses. Response efforts also put stress on the state budget, causing mid-year budget freezes and cuts totaling $504 million. [2]

There is no doubt that the state’s response would have been far weaker in the absence of state and federal emergency funds. Then-Governor Hunt called a special session and North Carolina lawmakers approved nearly $286 million [3] to be pulled out of the rainy day fund, which supplemented $838 million in federal emergency funds to support the response efforts. The funding primarily went towards housing programs and related expenses, support to small businesses and agriculture and fisheries programs.

Quick access to North Carolina’s rainy day fund may become history. In August, the state Senate passed a dangerous piece of legislation that would put at risk North Carolina’s ability to address widespread human and economic loss in the aftermath of the next disaster or economic downturn. Among other restrictions, SB 607 would put on the ballot a constitutional amendment that would require a two-thirds vote of the legislature to use the state’s rainy day fund. That’s a bad idea.

A supermajority rule would slow down the state’s ability to respond rapidly to emergencies, which would reduce the rainy day fund’s effectiveness in addressing pressing budget needs. Our lived experience tells us that rainy day funds work better under fewer restrictions [4], such as the supermajority rule. It also makes it possible for a small majority of legislators to hold up the process of accessing the funds, potentially leading to gridlock at a time when rapid response could mean the difference between life and death.

SB 607 would hurt all North Carolinians, but especially those living in the hurricane hot zones in the state’s eastern and coastal regions. Better options exist to support families, communities, and the state’s economy during periods of disaster.

Learn more here [5] about the full suite of constitutional changes included in SB 607, including a TABOR formula and a cap on income taxes that would force cuts to public education and other vital services.