We’re not shy about criticizing legislators when criticism is due. That said, we also like to point out when lawmakers do the right thing.
Earlier this week, The Insider reported about a Moody Analytics Report that highlighted North Carolina as one of 16 states that would be relatively well prepared to weather a moderate recession. Well prepared is defined as a difference of less than 1 percent between the actual reserves and necessary reserves to make up for the fiscal shock of a moderate recession. In the case of North Carolina, Moody’s estimates, a moderate recession would result in a fiscal loss equivalent to about 7.9 percent of the existing budget ($1.8 billion). North Carolina budget reserves currently total 7.6 percent of the budget. Hence the difference between actual and needed reserves is less than 1 percent.
The reason why states should have a “rainy day’ fund is because it does eventually rain.
Kudos to lawmakers who have supported efforts to fund it, as well as to those who supported recent legislation to set aside 15 percent of the estimated growth in tax revenue to the “rainy day fund”
Since the next recession, hurricane or flood is not a question of if — but when, it is money well saved.
A tip of the hat to lawmakers of both parties who support these common-sense budget practices.