North Carolina could operate its government for just over 41 days using only its rainy day fund, according to a recent analysis by the Pew Research Center. The state’s emergency reserve stands at $3.61 billion, or 11.4% of its spending, placing it below the national median of 46.9 days of financial cushion.
The 41.5-day figure marks a 17.8-day drop from the previous year, the fifth-largest decrease among all states. Although the rainy day fund was reported at $3.62 billion in October, state officials say other reserves push the total to $7.3 billion in set-aside cash. State Treasurer Brad Briner, a first-term Republican, confirmed that North Carolina has an additional $3.7 billion in reserve funds apart from the rainy day account.
In 2024, the state tapped into its reserves after the devastating impact of Hurricane Helene, which hit western North Carolina and caused 108 deaths along with an estimated $60 billion to $80 billion in damage. Ongoing budget negotiations have focused in part on replenishing the emergency funds used in the storm’s aftermath.
While the state still lacks a finalized budget for the current fiscal year, which began July 1, it continues to operate under its previous two-year spending plan totaling $60.7 billion. Adjustments have been made through appropriations targeting education and hurricane recovery efforts.
North Carolina’s financial situation has improved significantly over the past 15 years. Following the 2010 midterms, Republicans gained control of both chambers of the General Assembly for the first time in 140 years and began addressing a deficit that ranged between $800 million and $1.2 billion. Their efforts eventually turned that deficit into a $5 billion surplus prior to Hurricane Helene.
Compared to neighboring states, North Carolina’s 41.5-day cushion is lower than Georgia (51.4 days) and Virginia (47.4 days) but higher than South Carolina (38.5) and Tennessee (33.8). Meanwhile, Wyoming leads the nation with 320.2 days of reserve funding, while New Jersey ranks last with zero.
Pew analysts emphasized the importance of healthy reserves, noting that they help states manage economic downturns, forecasting errors, and emergencies without resorting to painful tax hikes or spending cuts. Rainy day funds are also vital to maintaining strong credit ratings, and North Carolina remains one of just 14 states to hold a AAA rating from all three major credit agencies.
