By Cedric Johnson, Policy Analyst
Budget & Tax Center
Lawmakers have introduced companion bills – House Bill 7 (HB7) and Senate Bill 14 (SB14) – that would make changes to the state’s existing Savings Reserve Account, commonly referred to as the Rainy Day Fund. The proposed changes would alter existing state law in two deliberate ways:
1. Mandating how deposits are made into the Savings Reserve Account
2. Placing restrictions on the ability of policymakers to access the Savings
The Rainy Day Fund is a critical tool to ensuring the stability of public investments through economic downturns and ensuring that the state can respond adequately to unexpected disasters. However, in the current context, reforms to the state’s Rainy Day Fund must balance the immediate needs in communities with setting aside dollars for as yet unidentified and unanticipated future needs. Today, in particular, the Rainy Day Fund is a critical source of funding for the immediate needs in Eastern North Carolina as the region rebuilds from Hurricane Matthew.