Policymakers seek to make changes to the state’s Rainy Day Fund. Two companion bills – House Bill 7 (HB 7) and Senate Bill 14 (SB 14) – have been introduced that would alter how deposits are made into the fund and that would place restrictions on the ability of policymakers to use the fund.
A new BTC brief highlights implications regarding what the proposed changes to the Rainy Day Fund means for our state in the short and long term. The Rainy Day Fund is a critical tool for ensuring the stability of public investments through economic downturns and ensuring that the state can respond adequately to unexpected disasters. However, prioritizing building up the Rainy Day Fund when many communities are in need of umbrellas today – communities ravaged by Hurricane Matthew, for example – fails to ensure that opportunity and economic prosperity is broadly shared here in the Tar Heel State.
Reforms to the Rainy Day Fund may be warranted to ensure that adequate savings are in place in the event of unexpected economic crises. However, changes should be designed to ensure that dollars can be put to use when needed, which is how the Rainy Fund is currently structured and should remain. North Carolina policymakers have prioritized savings in recent years – socking away nearly $674 million in the past two years alone – but have also neglected investments in the infrastructure and services that can help the state better weather downturns and natural disasters.
The BTC brief highlights ways to improve HB7 and SB14 so that lawmakers are able to balance the goal of stability in public investments while being responsive to addressing community needs.