RALEIGH — Thanks to the fiscally responsible policies of the North Carolina General Assembly, state government has some $5 billion in unspent funds and unanticipated revenues in its General Fund. And thanks to the fiscally irresponsible policies of Congress and the Biden administration, North Carolina will receive another $5.2 billion in “COVID-19 recovery” funds that will be borrowed from Chinese investors and other holders of federal treasuries.

Gov. Roy Cooper and his aides have looked up at that towering, tottering mountain of one-time cash and taken its measure. They think it’s too small.

So in the 2021-23 budget proposal he just released, the governor is recommending that North Carolina borrow another $4.6 billion for capital spending on schools, colleges, universities, museums, and other government facilities. Some of these projects are clearly worthwhile. Others are pork-barrel giveaways. Still others are somewhere in the middle — nice-to-haves, let’s say, though hardly must-haves.

I’ll say two positive things about Cooper’s debt scheme. First, it is true that, all other things being equal, it is better to borrow when interest rates are low than when they are high. Second, Cooper proposes that the new debt be issued as general-obligation bonds, meaning that North Carolina taxpayers will get to vote on the package in a bond referendum.

But even at low interest rates, borrowing is costlier than paying cash. And Cooper proposes to put his massive borrowing spree on the ballot in an off-year, low-turnout election. A better approach would be to be put state government’s current surpluses to effective use, including a concerted effort to pay down the state’s already burdensome debt load.

While the state currently has $4.1 billion of General Fund debt on its books, that’s not its only fiscal obligation. The state has also promised pension and health benefits to current and former public employees. North Carolina’s pension fund is better funded than that of most states, but not yet fully funded. And the unfunded liability for retiree health benefits is staggering: about $28 billion.

This big hole in North Carolina’s financial position is hardly invisible. Governor Cooper sees it. His budget even included a $150 million deposit into the reserve for health benefits. Given the current surplus, however, this is also pitifully inadequate.

With more than $10 billion in cash to spend, we don’t need to borrow another $4.6 billion. Instead, the state legislature should convert that one-time surplus into ongoing benefits for North Carolinians.

First, I recommend that lawmakers put $1 billion into the state’s pension fund, $2 billion into the state’s retiree-health reserve, $500 million into dedicated reserves for disaster relief and the state’s turbulent Medicaid program, and $2 billion into the state’s rainy-day reserve.

In the latter case, that would take the rainy-day fund to $3.1 billion, which comes to about 12% of last year’s General Fund budget. Most economists believe 2021 and 2022 will be banner years for economic recovery. I certainly hope so. But having a healthy cushion of operating expenses in the bank is a sensible precaution, and will keep North Carolina from having to raise taxes or cut programs with a meat cleaver if bad news comes.

As for the remaining cash, I think the General Assembly should do a combination of capital investment and debt reduction. We absolutely need to upgrade key state assets, from education and health institutions to prisons and courthouses. We can do that while also paying down some of our $4.1 billion in bonded indebtedness, which consumes hundreds of millions of dollars a year that could be devoted to future operating expenses or tax relief.

Keep in mind that I’m only talking about North Carolina’s one-time cash. The state is projecting robust revenue growth next year, which can fund essential services and pay raises for public employees.

Politicians make some of their worse decisions during the “best” of times. Fiscally speaking, that’s where North Carolina is right now. The governor erred in proposing a new borrowing spree. Lawmakers should pursue a wiser course.