COVID-19 Wiped Out A Lot Of North Carolina's State Savings
This story is part of anNPR nationwide analysisof states' revenue and budgets during the pandemic.
North Carolina is not unique in that it, too, is facing a considerable budget shortfall, with unemployment now sitting in the double digits. What does make the Old North State something of a standout is that it entered the pandemic with a considerable amount of cash on hand.
Sales and gas taxes have plummeted and the state is bracing for as much as a 10% drop in revenue, amounting to more than $4 billion.
However, state legislators are cautiously optimistic that layoffs for state employees, including teachers, can be avoided. That's because of the more than $6 billion in cash that the state had in various coffers as the pandemic hit.
In recent years, Republicans have built up the rainy day fund, cut unemployment benefits — while simultaneously beefing up those reserves — and also hunkered down in an ongoing budget stalemate with the Democratic governor.
North Carolina has now gone more than a year without a new budget, leaving more money on the bottom line. Budget writers expect to receive a complete revenue picture this month, following the delayed income tax deadline.
Legislators will reconvene in early September when they plan to address the most pressing fiscal needs.
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