North Carolina To Receive $4.1B In Stimulus Money To Balance Budgets
A decade ago, President Obama’s stimulus during the Great Recession was $800 billion. Much of that money was for “shovel-ready” construction projects – not cash to help cities and towns balance their budgets.
With little help, Mecklenburg County made deeps cuts.
The parks lost funding. County funded libraries closed branches. CMS closed 10 schools.
But in 2020's coronavirus pandemic, the federal government’s $2.2 trillion stimulus has a $150 billion fund to help state and local governments weather what’s expected to be an economic collapse, at least short term.
“The nature of this stimulus is different in that in 2008 we were really facing a crisis of demand where people weren’t spending, people weren’t investing because of lack of a lack of confidence in the economy,” said Wesley Tharpe with the nonprofit Center on Budget and Policy Priorities.
“This is a different animal in that we’re sort of putting the economy into a little bit of a temporary induced coma to confront the public health crisis.”
Tharpe says North Carolina is eligible for $4.1 billion and that cities and counties of more than 500,000 people are eligible for $200 million from the coronavirus stimulus. It’s unclear how that $200 million would be divided between Mecklenburg County and the city of Charlotte.
If the stay-at-home order is in place for only a few weeks, that could be enough money to make Mecklenburg County and the city of Charlotte whole. They are mostly funded by property taxes – which have mostly been paid – and sales taxes are only about 15% of their budgets.
Mecklenburg County Manager Dena Diorio says the county was in poor shape during the Great Recession because it had been spending its reserves to balance its budget.
“Now our reserves are incredibly healthy,” Diorio said. “And so we have the ability to manage that revenue loss more effectively than we did in 2008, 2009 and 2010. People have asked us why we have such large fund balances and reserves and this is why.”
She says she is willing to spend some of those reserves - $259 million - to avoid the steeps cuts made in 2009 and 2010.
“You know, we don’t want to cut parks,” she said. “It took us 10 years to get back to get back what we cut when we cut parks back then.”
What’s unclear is how the city and county will fare if the crisis continues into the summer – and if stay-at-home orders send the economy into a prolonged recession.
And there are other agencies that depend much more heavily on the sales tax.
The Charlotte Regional Visitors Authority, for instance, is almost entirely dependent on sales taxes on hotel rooms and restaurants – two sectors of the economy that have been crippled.
And the Charlotte Area Transit System is also heavily dependent on the half-cent sales tax that’s dedicated just for transit. And, for now, CATS has also stopped collecting fares, which is about 20% of all revenue.
The good news for CATS is that the stimulus does have pots of money specifically for transit, along with $31 billion for K-12 schools nationwide.
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