No budget, no replenishment for North Carolina’s rainy-day fund ahead of hurricane season

RALEIGH, N.C. (WNCN) – Lawmakers in Raleigh have not come to an agreement on a final state budget, which means North Carolina’s Savings Reserve Fund, also known as the rainy-day fund, hasn’t been replenished since it took a major hit after Hurricane Helene.

“It is always a risk to let that drop because, as we saw with Helene last year, the amount of damage far out exceeded the rainy day fund,” David McLennan with Meredith College said.

The fund has dipped below its typical $4.75 billion amount.

“To put it in perspective, it’s down about 30% from its peak; it was at almost $5 billion at one point,” McLennan said.

Right now, the fund is sitting at around $3.6 billion. That money could be needed if Tropical Storm Erin impacts North Carolina next week, something meteorologists are watching closely.

The fund may be more important this year than ever because of uncertainty around any help from the federal government for storm response or cleanup.

RELATED: Tropical Storm Erin struggling, but forecast to become Category 3 hurricane by Sunday

“The balance between federal and state aid for the last 30 years, 40 years, has typically been a majority from the federal government, supplemented by state and local monies, but now that’s in question,” McLennan said.

McLennan says for years now, the federal government has taken on about 90% of the financial responsibility for storm cleanup. That didn’t happen after Hurricane Helene.

“That puts a lot of pressure on the state to respond to everything from temporary housing, road reconstruction, all the way up to how do we deal with businesses?” he said.

But it’s not all doom and gloom. Even without a budget, lawmakers can pass bills individually to fund storm responses if need be.

“I don’t think North Carolinians should be concerned that no money would come from the state government, but the annual budget process does replenish the rainy day fund,” McLennan explained.

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