In April, Gov. Cooper signed a measure into law that Moody’s Investors Service praised as a “credit positive” commitment for the state.
Under House Bill 7, 15 percent of the estimated tax revenue growth each fiscal year must be transferred to the state’s Rainy Day Fund. The fund, in turn, has limits on how it’s used to prevent it from being exhausted in one year.
Moody’s, one of three agencies that provides credit ratings for commercial and government entities across the U.S., noted that while North Carolina is rated AAA stable, its reserves have been below average. HB 7, along with recent voluntary deposits to the Rainy Day Fund, will boost the state’s financial flexibility and ability to respond to problems in the future, Moody’s says.
In 2016, North Carolina had a brush with such problems, including Hurricane Matthew and the wildfires in the western part of the state, and the Rainy Day Fund was helpful in providing disaster relief.
House Speaker Tim Moore also praised the measure in a press release: “The Moody’s praise for our billion-dollar rainy fund is another sign North Carolina House Republicans are serving taxpayers responsibly by saving for the future and providing financial security for the citizens of this state.”