We are all working to cope with the outbreak of the coronavirus (COVID-19) in China, and the virus’s escalation into a global pandemic.
Gov. Roy Cooper and President Donald Trump have declared states of emergency. Gov. Cooper has further ordered the closure of all public schools for two weeks, on top of implementing a temporary ban on gatherings of more than 100 people.
An 11-year long bull market has ended, and the financial markets are volatile from hour to hour. There are some shortages of household supplies. Businesses and parents are scrambling to figure out how the next two weeks look.
One important thing for North Carolinians, in particular, to remember is that our state is prepared for emergencies. There will be plenty of opinions offered by pundits, including me, over the next 42 days until the North Carolina General Assembly comes into session on April 28. Plenty of people will have opinions about what money needs to be spent, what regulations need to be changed, and how North Carolina should work to recover economically after the viral storm of COVID-19.
Regardless of what those debates look like, North Carolina is financially prepared due to a decade of fiscal discipline and a growing economy.
As many families are learning in the face of this pandemic, it is crucial to be prepared.
Just a few years ago, North Carolina’s rainy day fund (savings reserve) was empty, and the state’s Medicaid program was seeing consecutive years of cost overruns running into the hundreds of millions of dollars. Can you imagine if that was our current financial situation with the state government? We would be entirely unprepared for COVID-19.
Since 2010, conservative lawmakers have made transformative moves to rebuild the rainy day fund, reform the tax code to reduce revenue volatility, reform the Medicaid program, and prepare for North Carolina’s next crisis.
As of the latest report from the Office of the State Controller, North Carolina’s rainy day fund now has $1.17 billion, the State Emergency Response and Disaster Relief Fund has $74.4 million, and the Medicaid Contingency Reserve sits at $186.4 million.
There is still a lot to learn about this current crisis. There will be plenty of debates and policy proposals. But thanks to fiscal reforms, North Carolina is a better Carolina than it was ten years ago. Thanks to those reforms, we are prepared for this storm.