Publisher's note: The author of this post is Brenee Goforth for the John Locke Foundation.
This week, JLF's Joe Coletti wrote a research brief on how North Carolina could use its funds to respond to the economic fallout of the Coronavirus. Coletti lets us know (1) how much money the state has, (2) where it is, and (3) where it could go. North Carolina has over $3 billion that it could allocate to mitigating the economic fallout of Coronavirus. North Carolina's largest money stores are the $1.2 billion in the Savings Reserve rainy day fund and $2.2 billion in unreserved cash.
In addition to the unreserved and rainy day funds, Coletti writes:
- There is $186.4 million in a Medicaid Contingency Reserve, created in 2014, for cost overruns... Medicaid is all but certain to spend more than budgeted, even with higher federal reimbursement rates. Legislators also have $425 million ready to fund Medicaid's transition to managed care. Legislators should confer with health care leaders before deciding to go ahead with the shift to managed care, hold the money for a later transition, or redirect the money to more urgent needs.
Coletti goes on to mention additional monies in the Emergency Response & Disaster Relief Fund, non-reverting funds, and the Unemployment Trust Fund.
As for what the state can do with the money, Coletti writes:
- An inexpensive and highly effective way the government is already providing help is with this page with a partial list of places for people to donate their time or money to help their neighbors...
- As Jon Sanders recommended, state government can "give extensions for expiring driver's licenses, expiring vehicle registrations, and other nonessential services that require in-person visits and standing in lines at government offices." Extending renewals for vehicle registrations would mean a delay in local property tax collections. North Carolina created the Local Government Commission back in 1931 when towns across the state ran into financial problems. The LGC could backstop property tax assistance. For local governments trying to keep people housed, this assistance could be provided in exchange for enforceable pledges to remove zoning and to permit barriers that make housing expensive.
Read the full piece HERE
. Learn more about how North Carolina is uniquely poised to respond to COVID-19 HERE