Perdue rolls out changes for $19B N.C. budget (Associated Press)
By GARY D. ROBERTSON
RALEIGH — Democratic Gov. Beverly Perdue proposed Tuesday that legislators trim another 2 percent in state spending from North Carolina’s government budget for the coming year in part by eliminating or reducing dozens of programs and requiring cash-strapped local school districts to make even further reductions.
Perdue released her recommended changes to the second year of the two-year budget approved by the General Assembly and signed by the governor last summer. Her plan would reduce the budgeted amount by a net $410 million to $19.1 billion.
The reductions she wants starting July 1 reflect the still-troubled economy generating less tax revenues than was predicted last August. Tax collections are only expected to grow 2.7 percent. It’s still an improvement over the historic 10.9 percent decline in collections the last fiscal year and the slight decline for the year ending June 30.
“North Carolina’s economy is stabilizing again,” Perdue told reporters in releasing the plan, but “I don’t believe any time soon we’ll be back to the giddy days of 2007 and early 2008 … This budget helps us set the table for that ‘new normal’ and it also propels where we need to be as the economy improves.”
While the governor said the proposal reduces spending by $950 million, it would funnel much of those cost savings toward expanding her “Ready Set Go!” education initiative and small business tax breaks and corporate incentives, teaching more community college and university students, improving mental health services and pay for employee salaries and benefits.
Perdue also wants a new transportation fund, paid for mostly with higher fees, to build urgent projects like the Yadkin River Bridge replacement on Interstate 85. The Medicaid program to provide in-home personal care services would be retooled to get a handle on overspending after efforts this year have failed.
There are no broad-based tax increases, although car and truck owners would see their annual state vehicle registrations rise from $28 to $35 to pay for the new North Carolina Mobility Fund, which Perdue’s office hopes will one day reach $300 million.
“It’s a realistic budget. It makes tough decisions now instead of kicking them backward or forwards for another time,” Perdue said. Another 600 positions would be eliminated in addition to the 2,000 this year, according to Perdue, although most of newly targeted positions are vacant.
The state also expects another $578 million in expected federal stimulus funds to help close a budget gap projected at $1.2 billion. Given that Perdue also held back funds in this year’s budget to narrow a revenue shortfall, Republicans weren’t impressed with what the governor called a fiscally sound plan.
Fellow Democrats who control the House and Senate already are working on their own budget adjustments ahead of the May 12 convening of the Legislature.
“I have talked with Gov. Perdue about her guiding principles for this budget and they align with what most of us in the General Assembly support,” said House Speaker Joe Hackney, D-Orange. “This is a strong document for us to start with.”
Perdue’s budget office said most state agencies would take an additional 4.5 percent to 7 percent spending reduction on top of 10 percent reductions last year. The paring of public education would be a little less, but education leaders lamented additional reductions.
The state’s local school districts also would have to find another $215 million in discretionary spending reductions. Districts that eliminated more than 4,000 teacher positions this school year while finding a combined $225 million in savings could have to eliminate another 2,430 positions next school year, the North Carolina School Boards Association said.
