“We had to cut, we had to cut deeply, and we had to cut across every sector of state government,” said Representative Melanie Wade Goodwin (D-Montgomery, Richmond). “We worked diligently in our appropriations subcommittees, looking for any way we could just eliminate programs that were not working and decrease funding for contract programs or non-profit pass-throughs; but ultimately we just have to cut in every department.”
This Senate’s version was based on an expected revenue of $20.8 billion; by the time the budget got to the House, that number had dropped to $17.5 billion.
House Democrats filled the 50 percent of the $4.5 billion hole with cuts, 30 percent in federal stimulus money and 20 percent in new revenues.
“Next year we are facing a projected deficit of $4.2 billion,” said Senator William Purcell. “ I do believe that a balanced approach to deal with these problems will be needed. The revenue plan that I have seen will reduce taxes in some areas and broaden the tax base to cover more services.”
The budget passed by the House Monday night included a tax package that would do the following: Increase sales tax from 6.75 to 7 percent; increase the liquor tax by 1.5 percent; increase income taxes for individuals who earn more than $200,000 per year; increase the number of businesses having to pay franchise taxes and modify corporate income tax forms. The proposal also taxes more services, like installations, repairs and maintenance.
“We’ve become a service-based economy,” said Goodwin. “So we have had to look at taxing services rather than taxing things.”
According to Goodwin, the $785 million in revenue that the House budget would generate will go toward protecting as much as possible the areas that have been deemed most critical: Kindergarten through third grade public education and Health and Human Services.
In Goodwin’s opinion, the most painful cuts were those to education. Lawmakers targeted 10,000 teaching positions for elimination; new revenues saved 2,600 of those. But the local impact is still looming.
“Richmond County education authorities are already making adjustments to their budget in anticipation of what they’re going to receive for the next fiscal year,” said Goodwin, citing the plans to close Central Office one day per week to conserve energy and money. “A number of teachers have already been told that they will not be back next year.”
According to County Manager Jim Haynes, the county has already lost some income in social services.
“We didn’t count on that so we just kind of absorbed it,” said Haynes. “If other programs we run are being cut, we are just going to pass along the cuts in services, generally. An example would be Work First. If it’s cut back $5,000 then we will spend $5,000 less in Work First.”
Medicaid took a big hit. But according to Goodwin, the House budget would restore some funding for state-funded mental health customers like Sandhills Area LME, service to the mentally disabled, increased foster care rates, a program to buy hearing aids for infants, in-home personal care services and physical, speech and occupational therapy.
Meanwhile, Goodwin’s own subcommittee, Justice and Public Safety, will have to find a way to close eight prisons.
“So we’re talking about double-celling and triple-celling in the other prisons when we are already short on prison beds in this moment,” she said.
The Senate was unable to concur on the House budget; leaders from each chamber will now be selected to form a concurrence committee. What they decide on will go back to both chambers for a vote, then on to the governor for approval.
“We are pushing from the House side to get it done by June 30,” said Goodwin. “Because we have been receiving information from the office of budget management that we will severely limit state services is we have to remain in session.”