Despite tight budget, Perdue wants to pay back teachers, state workers (WRAL.com)

Posted: 1:20 p.m. yesterday
Updated: 6:19 a.m. today

RALEIGH, N.C. — When Gov. Beverly Perdue unveils her budget proposal Tuesday morning, it will include millions of dollars in spending cuts, some new fees and more money for state workers and teachers, legislative sources told WRAL News.

Fiscal analysts project a $788 million deficit for the budget year that begins in July, and cuts will be used to erase most of that gap, said sources who have seen a draft of Perdue’s proposed budget.

Watch Perdue unveil her budget proposal at 9:30 a.m. LIVE on WRAL.com.

“Everybody’s going to be hit. Everybody has to, you know, suffer,” said Rep. Mickey Michaux, D-Durham, senior chairman of the House Appropriations Committee.

State agencies were told in recent months to draw up spending plans that reflect 3, 5 and 7 percent reductions for the coming year.

A coalition of 100 state organizations sent a letter to Perdue and legislators Monday supporting a more balanced approach to budgeting and expressing opposition to a cuts-only approach.

Michaux said lawmakers will try to protect education and the Department of Health and Human Services from cuts as much as possible.

“We certainly don’t want to do anymore on education than is necessary. We don’t want to do any more on health and human services, particularly in mental health and personal care services,” he said.

The governor also has proposed raising court fees to generate some additional revenue, sources said. No tax increases are included in the budget plan.

Last year, lawmakers approved about $1 billion in new taxes to close a $4.5 billion deficit, including raising the state sales tax and imposing higher taxes on alcohol and cigarettes.

Perdue’s budget also includes money to repay state workers for furloughs ordered a year ago to save money in the 2008-09 fiscal year and to reinstate the step increase in teacher pay that was frozen last year to balance the 2009-10 budget, sources said.

Some cuts will free up money in the budget for those pay increases, while others could allow some state programs to expand.

Perdue’s budget advisers say the goal is to be more efficient and to trim state government spending with minimal job losses. Vacant positions will be targeted in most cuts.

Michaux said he is confident the money is out there to accomplish that goal.

“I can tell you one agency right now that’s sitting on a $20 million surplus. I can tell you another agency – and this is in education – that’s sitting on roughly $200 million,” he said, declining to be more specific.

• Reporter: Bruce Mildwurf
• Photographer: Greg Clark
• Web Editor: Matthew Burns

Perdue will release budget proposal today (News and Observer)

Published Tue, Apr 20, 2010 02:00 AM
Modified Tue, Apr 20, 2010 06:48 AM

RALEIGH Gov. Bev Perdue plans to release her budget proposal this morning, and the big question is who and what will get the ax.

Budget forecasters agree that the state is facing a deficit for next year that has already reached $788 million, nearly 4 percent of the state’s general fund. The state is still counting all those tax returns from people and businesses that were mailed April 15, and officials generally accept that the news on state revenue is likely to get worse.

That means something or someone in state government is going to get cut.

“This budget is going to cut close to a billion dollars,” said Perdue spokeswoman Chrissy Pearson. “She will find savings through trimming the fat, finding efficiencies, improving the way state government works and the way state government spends our tax dollars.”

The legislature convenes in May to consider Perdue’s budget proposal. Each chamber takes a turn writing its own version of the budget. When the House and Senate reach agreement, Perdue can either sign or veto it.

The current $19 billion budget was balanced through a combination of spending cuts and about $1 billion in new taxes. It’s an election year, and the Democrats who control the legislature are unlikely to add new taxes. That leaves lawmakers wondering what real cuts are left to make.

“People are beginning to sense this,” said Sen. A.B. Swindell, a Nashville Democrat and budget writer in the Senate. “I hear from people who say, ‘My God, how much more can you cut?'”

Plenty, say Republicans, who complained that last year Democrats overstated the spending deficit and raised taxes instead of just making do with the money available. Unlike the federal government, North Carolina must have a balanced budget under the constitution.

State Rep. Paul Stam, an Apex Republican and the chamber’s majority leader, said he expects to see Perdue float some small tax cuts or credits that are meant to distract from the tax increases last year.

“She’ll come out with a half a dozen tax credits or tax rebates that won’t amount to a hill of beans,” Stam said.

Perdue’s proposal will include revenue numbers that will be outdated before the ink is dry because the state’s tax collections are not yet tallied. But lawmakers said it’s helpful for Perdue to get the conversation started now.

“It gets everybody looking,” said Rep. Mickey Michaux, a Durham Democrat and budget writer in the House. “If she waited too late, minds probably would have been set.”

Swindell said any significant cuts to programs would most surely mean significant cuts to the state’s work force.
“If you’re talking about programs, you’re talking about people,” he said. ” …[H]ow does one find that kind of money? That’s people. Your money is in people.”

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N.C. lawmaker: Expect $1B in cuts in Perdue budget (Associated Press)

Monday, April 19, 2010 (Updated 10:57 pm)
By Gary D. Robertson

RALEIGH, N.C. (AP) — Gov. Beverly Perdue’s spending proposal for next year likely will contain aggressive efforts to improve North Carolina’s public education and mental health systems as well as spending cuts of around $1 billion to help pay for them, legislative budget-writers said Monday.

Perdue, who is scheduled Tuesday to propose adjustments to the $19.6 billion budget already approved last summer and set to begin July 1, also wants changes to the personal care services program that has struggled with Medicaid overspending, according to a lawmaker who got a preview last week from Perdue and her staff.

“She’s got an ambitious program,” said Rep. Mickey Michaux, D-Durham, senior co-chairman of the House Appropriations Committee. “We’ve got to see how ambition works out.”

Michaux and a Senate budget-writer interviewed Monday declined to discuss specifics about the health or education initiatives. The Democratic governor hasn’t provided many hints publicly about what she wants lawmakers to approve during this year’s session save for a $17 million small business assistance package and ethics reforms.

But Perdue has said her spending plan would include efforts to expand her “Ready Set Go!” program designed to ensure every child must graduate from high school with the skills to succeed in a career or attend a community college, university or technical training.

Perdue spokeswoman Chrissy Pearson confirmed last week the budget proposal would have money to pay for hand-held devices teachers can use to make real-time diagnostic assessments of students to ensure they don’t fall behind their classmates. Each device costs about $300, Pearson said. Perdue said in January she would shift money away from outdated or unnecessary state programs to find additional cash.

“The bulk of the budget will be about trimming state government (and) finding ways to make state government leaner,” Pearson said Monday.

Perdue also said in March she wanted to repay North Carolina state workers their lost wages for taking away 0.5 percent of their salaries last year to close a budget shortfall, at a cost of $65 million.

Pearson declined to comment late Monday on whether Perdue would propose any pay raises for state employees or teachers, or whether new taxes or fees would be in the budget.

Rep. Pryor Gibson, D-Anson, co-chairman of the House Finance Committee, said he foresaw no major tax increases in part because he’s not aware of Perdue floating the idea with lawmakers: “I wouldn’t expect her budget to have any surprises in the tax department.”

The state Medicaid office has struggled to reduce personal care services spending by $40 million as required in this year’s budget. Next year’s budget is slated to boost those savings by another $20 million.

Michaux said Perdue’s adjusted second-year budget would cut about $1 billion — a reflection of another round of fiscal challenges faced by the governor and fellow Democrats who control the House and Senate.

The fiscal numbers aren’t as bad as last year, when Democrats said they closed a budget gap of $4.6 billion with spending cuts, federal stimulus money and $1 billion in new taxes.

Perdue’s budget office and the legislative fiscal office agree for now the state will receive $788 million less than expected for the new year’s budget. Lawmakers say that means they may have to find up to $1.2 billion in spending cuts, additional revenues or both when they reconvene May 12.

With lawmakers considering an additional 5 percent in cuts and Perdue’s administration budget reductions of up to 7 percent, there’s little fat remaining in state government, said Sen. A.B. Swindell, D-Nash, one of the chief Senate budget-writers.

Spending cuts last year caused several hundred state employees to lose their jobs and more than 5,000 teacher and educator positions in local school districts to be eliminated, according to state data. State education boosters predicted the public school job eliminations could increase to 7,000 if lawmakers don’t prevent local education cuts from increasing by $80 million to $305 million.

“We are headed in the wrong direction when it comes to public schools in North Carolina,” Sheri Strickland, president of the North Carolina Association of Educators, said at a news conference last week urging lawmakers to improve school funding.