Carolina Journal has been investigating the use of “reserve funds” in the state budget, revealing billions of taxpayer dollars that are allocated but not reflected in the reported totals. This practice has allowed for significant budget expansion beyond what is typically shown in headlines.
This week, the focus is on the Local Project Reserve Fund, a separate funding vehicle from the Economic Development Project Reserve, with subtle differences in their purposes. The Local Project Reserve Fund primarily provides small grants to local governments, non-profits, and education systems, while the Economic Development Project Reserve is geared towards economic development recruitment activities.
The Local Project Reserve Fund, established in the 2022 budget with an appropriation of $80.1 million, was quickly spent on various non-recurring fund line items. Most of the funds went to local projects, non-profits, education, law enforcement, historical societies, and recreational centers. Only $2.3 million out of the $80.1 million was kept in the reserve, with the rest immediately allocated to projects.
Reports from the Office of the State Controller show that the $2.3 million allocated to the Department of Natural and Cultural Resources was deposited in September 2022 and spent by October 2022, with detailed line-item appropriations included in the Joint Committee Report.
Critics like Brian Balfour of the John Locke Foundation argue that the Local Project Reserve Fund functions as a “slush fund” for pork projects, diverting taxpayer dollars to projects that should be funded locally or not at all. The process of funneling funds through this reserve allows the government to conceal the true extent of spending, undermining transparency and misleading citizens. This investigation sheds light on the complexities and potential misuse of reserve funds in North Carolina’s budget.
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Photo credit www.carolinajournal.com
