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Perdue urges legislature to pass budget
Stopgap spending bill is depriving state of new tax revenue, savings, she says
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Published: July 2, 2009
RALEIGH
Gov. Bev Perdue put pressure on legislative leaders yesterday to approve a final budget for the new fiscal year as soon as possible with a tax plan that will prevent more job losses or furloughs.
Perdue told reporters that the legislature's two-week stopgap spending bill she signed into law Tuesday still prevents state government from realizing several million dollars in expected tax increases and cost savings every day.
Every bit counts as House and Senate leaders assemble a two-year state government spending proposal that's likely to spend $18.8 billion in state money -- or $2.5 billion less than what was budgeted last year before tax collections plunged by a record amount.
North Carolina is one of only six states that doesn't have a permanent budget in place for the coming year.
"My message to the General Assembly on July 1 is pretty in-your-face: They need to act quickly and focus on the core services," Perdue said outside the old Capitol building. "They've got to act to protect education.... they've got to raise some revenue."
Perdue's fellow Democrats at the legislature said they were working on putting together a plan, but the House and Senate remain far apart on how to collect an additional $1 billion in new revenues this coming year.
But missing the deadline to assemble a budget isn't surprising. A budget bill hasn't been signed on time since 2003.
"We've done this year in and year out," Senate leader Marc Basnight, D-Dare, said before going to visit Perdue late yesterday. "We'll get it done as quickly as we can."
Added Rep. Jennifer Weiss, D-Wake, one of the House's chief tax negotiators: "We need to reach an agreement as soon as possible and we're committed to doing that."
Perdue sounded ambivalent about competing House and Senate revenue packages except that more tax money is needed so public-school teachers know whether they'll have jobs this fall. She wants extra money to prevent class sizes from being increased, which could eliminate funding for 6,000 positions.
She said she would prefer a short-term revenue fix that could include a mix of increases on sales, income and cigarette taxes. She's willing to accept expanding the number of services that would be subject to the sales tax, but would prefer a more dramatic tax overhaul -- such as the plan of Senate Democrats -- to wait until 2010 or 2011.
"I continue to say we must have overall tax reform and it's got to be done in an open and very engaged process where people and individuals and communities across the state can find out who the winners and losers are," Perdue said. "That has not happened."
Perdue said she believed a new budget also would eliminate the need for additional furloughs for state employees, at least through the end of December.
Nearly all state employees had a 0.5 percent pay decrease in May and June so that Perdue could generate at least $3 billion in savings to balance the budget by Tuesday, as required by the state constitution.
"Last night was really dicey. We've paid all the bills thus far," Perdue said. "I pray we can get to the end."
(Sent via e-mail)
Office of Governor Bev Perdue / State of North Carolina
State of the Budget
For more than a year North Carolina, along with many states, has felt the impact of the national recession, which many of you have already experienced first-hand.
In that time, our state's unemployment rate has almost doubled and now stands at 11.1 percent — 7th highest in the nation. Just as North Carolina's families have been hurt by the recession, so has our state's budget.
The General Assembly is working to finalize a budget that, because of a decrease in revenues, has a $4.7 billion shortfall for the 2009-10 fiscal year and even more next year. It is one of the largest shortfalls in the country, and it is the largest in North Carolina's history.
Despite these monumental challenges, we have been able to achieve significant accomplishments in the last few months. Since taking office in January, I have worked to uphold the highest standards of accountability and transparency to ensure North Carolina's government is working in the best interest of its people, doing more with what little we have in these tough times.
This administration has streamlined policy-making and management in the public education system by appointing a CEO of public education. We have instituted more accountability and transparency in our state's mental health and probation systems, and we are taking the politics out of decision-making at the Department of Transportation.
Through my JobsNOW initiative, we are putting thousands of people to work, quickly investing federal recovery dollars and opening doors to new job opportunities. One example is my 12 in 6 program, a partnership with community colleges to retrain workers for high-demand jobs in less than six months.
Last month, I outlined a set of reforms and investments to establish this state as a leader in green energy jobs and business. And in March, I presented a balanced budget that invested in job creation and education, priorities that establish a strong base for North Carolina's long-term economic growth.
Since that time, however, the state budget hole has increased by another $1 billion.
As a result, budget proposals from legislators to date have included profound cuts to core government services.
We are now at a crossroads: We can choose to protect core education, public safety and health care services, or we can allow the economic crisis to cripple our classrooms.
Public education always has been, and always will be, the engine driving North Carolina's economy toward a future with secure, high-wage jobs. Gutting public education now would throw away decades of investment and would cut short our long-term economy.
As I work with legislators to finalize the budget in coming days, we will need to cut deeply. But while we must cut the fat, we must not cut to the bone.
I've traveled the state calling on legislators to raise the revenue necessary to protect public education. Now I need your help. The budget crisis threatens our classrooms and so many other vital services, including health care and public safety. But if we act now we can save thousands of jobs and protect our children's education.
The time has come for the General Assembly to step up its efforts to pass a budget quickly and with the revenue necessary to protect the classroom. Our children and our economic future depend on it.
Sincerely,
Bev Perdue
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