North Carolina Treasurer Dale Folwell has high praise for Orange County, and Hillsborough specifically, with regard to managing its money and reserves during COVID-19 and the response to the pandemic.
Folwell recently spoke by phone with the News of Orange to talk about the “state of the State,” and offer his thoughts on the strength and direction of North Carolina’s economy, particularly during the pandemic.
“We have this medical virus which has very quickly turned into an economic virus,” Treasurer Folwell said. “It just seems to me that any time the country faces anything like this it’s normally the low-income folks who get hurt the worst. And I don’t think this is going to be any different.”
Folwell said North Carolina’s cities, counties and communities are struggling with budget shortfalls and having to “watch pennies and paper clips” more than they ever have before.
On that front, Orange County and Hillsborough have performed well. Fowell said, on average, cities and counties should have 25 percent of their annual revenue in reserve.
“Hillsborough has almost 50 percent of its money still sitting in its savings account,” Folwell said. “Orange County has $51 million, which represents 23 percent of its money in reserves. The local governments there in Hillsborough and Orange County have already shown they can watch the pennies and paperclips. And put money in reserve. I just want to applaud them.”
Folwell said Orange County applied for and received $2.67 million from the COVID Care Act that was recently passed by the North Carolina General Assembly and signed by Gov. Roy Cooper.
The Treasurer also touted the strength of the pension plan for state employees. “We had the pension plan stress tested eight months ago — before COVID,” he said. “Pew came back and said it’s one of the top handfuls of pension plans in terms of insolvency. Moody’s ranked it No. 1 in the country, in terms of our ability to withstand an economic shock. Of course, no one could have predicted the economic shock that we’re in. So, with all the things to be stressed out about in this environment, the safety and security of the North Carolina pension system is not one of those.”
The state-supported health care plan — for which Blue Cross and Blue Shield is the third-party provider — had offered a cost-share waiver to any of its 720,000 members who receive testing and/or treatment for COVID-19. That waiver has been extended through August.
“It’s a fluid situation,” Folwell said. “We think this is a valuable and important policy. We don’t want folks to have any financial barriers to getting the testing or treatment they may need. We want this benefit to exist until we no longer have to worry about this problem.”
The Treasurer has had a personal experience with the coronavirus when he was hospitalized in late March after testing positive for COVID-19. Folwell said he considers himself fortunate that his ordeal was brief and he was released from the hospital after several days.
And despite his bout with the virus, he is urging the state to make greater effort to avoid further economic damage because of COVID-19.
“I appreciate more than most the focus on the sick and the flattening of the curve,” Fowell said. “But now we’ve got an economic virus. And we’ve got to flatten that curve. The economic virus is simply associated with people who are locked down, immobile, and who can’t consume. That means they’re not generating the gas, sales, and occupancy tax necessary to fund public education and public safety, public works and public roads. This is a very serious situation, especially as we head into the next few weeks when Orange County and the city of Hillsborough are actually trying to set their budgets. It’s further complicated by the fact that, in many parts of the state, it’s not just the inability to pay, but there’s a connection here between the inability to pay and people’s inability to get their unemployment benefits. On top of that, there is a situation where it’s not just the inability to pay, the usage and consumption is lower for everything. When a business isn’t operating, it’s not using water, sewer and electricity the way these entities were budgeting. So this is really a double-whammy.”
Folwell said he is frustrated by the limits put in place with regard to how COVID-19 relief funds can be used.
“What the hell isn’t COVID-19 related? The fact that these communities can’t use this money to back-fill their real expenses, like pension; like health care; like interest on their debt; like providing the same level of service on public education, safety works and public roads. It’s just bizarre to me. Everything is COVID-19 related.”
Folwell said, ultimately, he’d like to remove some of these strings that are attached to the COVID money, what he refers to as “uneconomic things” just to say they got the money correctly.
“The economical things are to spend the money on maintaining the level of services that people are accustomed to. But to get some of this funding you might have to buy something you don’t need. That’s uneconomical.”
The Treasurer said the government was correct in offering a 60-day moratorium on utilities. But he questioned the benefit of extending it another 60 days.
“As we’re sitting here, we’re looking at people with compassion,” Folwell said. “If you tell people that they’re not going to have to pay their water bill, or power bill for four months, and then you tell them they’re going to spread out that four months of payments over the next eight months. If you look at that mathematically, for a lot of people in Orange County, you have put them in a hole they can never get out of.”