by Joseph Coletti
Senior Fellow, Fiscal Studies, John Locke Foundation
As more of America shuts down each day, nobody knows what comes next, but the current situation reminds us that it’s always been hard to make predictions, especially about the future.
House Speaker Tim Moore posted today about the $3.9 billion in North Carolina’s unemployment trust fund that can be tapped to pay benefits without charging an employer when the benefits are because of a federally declared disaster. We’ve considered other ways to help with state funds. Adapting to the education and health care imperatives of the coronavirus response do not require new money.
In contrast to the prudence in the legislative budget that was vetoed, Gov. Roy Cooper’s budget made a number of bets that depended on “no significant economic changes.” Chief among these bets was to take on $4 billion in debt for construction, repairs, and renovations instead of paying for those projects with cash. Cooper wanted to have more money to spend today, violating the spirit if not the letter of the constitutional prohibition against using debt for operating expenses. With NC Job Ready, Cooper again wanted to divert $150 million a year from the unemployment trust fund to spend $60–$75 million a year on another new job training program.
Legislators will have some tough choices when they meet again. The past week has created significant economic changes. North Carolina is fortunate to have cash and savings to adapt.