I received an email last night boasting, “[T]he state?s financial reserves are in better shape than they have been in a decade, with $800 million in savings and other avenues available to find money if disaster struck.”
That $800 million, however, is less than 4% of the General Fund this year. North Carolina’s government had a 5% reserve in 1988, but would have needed a 30% reserve to get through the next four years without a tax hike. The numbers for the last downturn are about the same and reflect the spend-and-tax problem of state budgets.
The state economy is not so stable or robust as to provide tax revenue growth every year. It really cannot meet all of the spending pledges made by our state legislators. Maybe the email’s author would be willing to pledge his own fortune in case the next downturn makes it necessary to raise taxes so the government can “extend that financial stability to families still without it.”
Maybe the General Assembly will allow him to donate to the state treasury.
