State legislators have one more month to solve a budgetary crisis that will likely cause deep cuts to education, health care and other essential government services.
North Carolina's new fiscal year begins on July 1, and the state is supposed to have a balanced budget in place by then.
Budget writers in the General Assembly will spend the next four weeks trying to figure out how to close a budget shortfall for next year that is now estimated at $4.6 billion. That shortfall represents nearly 25 percent of the total state budget that legislators passed a year ago, before the economy plunged and tax collections fell far below expectations.
At the end of last week, budget writers in the N.C. House in charge of health programs rolled out a long list of proposed cuts that would save the state more than $1 billion but that would also harm the neediest citizens, legislators said.
The proposals include lowering Medicaid payments to doctors and hospitals that treat poor patients, and cutting personal services for people who are sick, mentally ill or developmentally disabled.
Such cuts "will hurt a lot of very vulnerable people, vulnerable people that we all want to serve and have been working to serve," said state Rep. Verla Insko, D-Orange.
House budget writers in charge of education have released a similar list of money-saving proposals. They include increasing class size, eliminating teachers' assistants in third grade and raising tuition at community colleges and state universities. They have also discussed 10-day furloughs for teachers -- a proposal that would essentially cause the school year to be shortened by 10 days.
Many interest groups are loudly protesting the proposed cuts, saying that they are too deep and that the legislature should raise taxes instead.
The N.C. Association of Educators says it is "at war" over the education cuts, and the group has urged teachers to wear red on specific days to express opposition to the cuts.
"Taken all together, they will deal an absolutely devastating blow to public education," said Tripp Jeffers, the president of the Forsyth County Association of Educators. "It will take years to recover."
On Tuesday, people representing more than 70 different groups are planning to converge on the General Assembly to urge legislators to pass a budget that avoids the most drastic cuts and instead raises new revenue through "strategic tax increases." The coalition, known as Together NC, is made up of nonprofit organizations, service providers and advocacy groups.
Leaders in the House have said they do not want to raise taxes during the recession. But some legislators and political observers see that as a political maneuver. By putting forward a set of draconian budget cuts that would be required without tax increases, House leaders may be easing the way for an eventual tax increase in the final budget, they say.
Rob Thompson, an organizer of Together NC, said that taxes could be raised in a sensible way that does not hurt needy families.
"It's just not true that you can't raise taxes or you can't raise revenues in a time of economic hardship. You have to be careful about how you do it," Thompson said.
He suggested changes such as closing loopholes in the corporate tax code and expanding the sales tax to apply to more services.
On Wednesday, conservatives will promote the opposite message, holding a "tea party" rally at the legislature aimed at opposing any new taxes. Joe Wurzelbacher, who gained fame during last year's presidential election as "Joe the Plumber," is scheduled to speak at the gathering.
Ultimately, the decision on spending cuts and whether to raise taxes will come down to a small group of Democratic legislators. Sometime in the next two weeks, the House is likely to finalize its budget proposal. That's when a legislative "conference committee" will start working to reconcile differences between the House proposal and an earlier proposal approved by the Senate.
■ James Romoser can be reached at 919-210-6794 or at jromoser@wsjournal.com.
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