With billions in reserves, NC waiting to see pandemic’s effects before spending

Coronavirus

RALEIGH, N.C. (WNCN) – After the North Carolina General Assembly piecemealed its budget last year, $4.4 billion went unallocated.

At this moment, it is still sitting there.

“We need to make these investments now to ensure that we can contain the spread of economic harm as well as the public health harm,” said Alexandra Sirota, director of the Budget and Tax center for the North Carolina Justice Center.

Because budget forecasters don’t know how the COVID economy will affect income this year, legislators may have to dip into that $4 billion to prevent cuts in state agencies including education.

That’s according to a spokesman for Senate President Pro Temp Phil Berger (R).

They also say they’re waiting on the latest round of federal relief including $700 million in rental assistance and don’t want to spend what the feds will pay for.

However, Sirota said people can’t wait.

“The reality is the scale of need is just alarming. I mean we know that so many, hundreds of thousands of people are behind on rent, behind on utility payments, struggling to put food on the table, so holding back these dollars now is hurting people and hurting our chances of recovery.”

The $4.4 billion does not include an additional billion in the state’s rainy day fund.

The uncertainty of tax revenue and income is enough though to lead Republican leadership to be wary of spending what’s on hand.

Sirota said lack of infrastructure over the course of years has caught up to us.

“What we need right now is to start thinking long term about how we keep in place support until the economy is recovered and people are safe, healthy and doing ok and we’re very far from that point right now,” she said.

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