Philip D. Brown

Richmond County Daily Journal

The budget delivered to North Carolina Senator Bill Purcell’s desk Tuesday morning took a long time to hash out and is not what he would’ve liked to see, but he confirmed he’ll vote for the two-year spending plan.

“It does have my support,” Purcell said. “It’s not what I’d like to do, but I feel it’s what we can do.”

The budget proposal came in about a month late, and reflects about $19 billion in spending and $1 billion in tax hikes.

Purcell said the extra time reflects the tough decisions lawmakers were faced with.

“It’s been this way before, but we’re talking about a large amount of money and it takes time to work out the details,” Purcell said. “What’s special about this budget is we had a shortage of funds, and the question was how do you deal with it.”

The way legislators have chosen to deal with the problem is by raising taxes by about $1 billion and making cuts across all categories of state spending.

Those cuts include $1 billion in education in funding to local school boards, and those tax increases include a one-cent sales tax hike and a surcharge on income taxes that applies to individuals who make $60,000 a year or married couples who make $100,000 a year.

The report also has tax increases coming on cigarettes and alcohol, as well as some Internet purchases.

The budget did, however, achieve two of Gov. Bev Perdue’s main objectives in avoiding across-the-board income tax increases, and across-the-board class size increases. However local governments will still have to decide how to cope with a decrease in funding in the budget.

Purcell is the co-chair of the Senate’s committees on health and human services appropriations and health care. He pointed out the $3.9 billion budget proposed for this department is $1 billion less than last year’s proposal of more than $4.9 billion.

That means a fifth of the department’s budget was lopped off.

“When you consider that $500 million of those cuts are from Medicaid, the federal money we’re going to lose is $1.5 billion because they match funds three-to-one,” Purcell explained. “So, we’re talking about $2.5 billion in services that will be taken away from the citizens of North Carolina.”

Purcell said more than 500 positions have been cut from the Health and Human Services budget, and $40 million in funding cuts have been made for mental health local management entities to pay their service providers.

He said the cuts are appropriate considering the state’s financial situation, however, pointing out that state income taxes were down 41 percent in the state this year.

“We’ve got major financial problems here even using ($1.3 billion in stimulus funding in the total budget),” he continued. “Even with that money we’re still making these Draconian cuts. I don’t think people understand how major this recession really is.”

To make up for the lack of income taxes, budget cuts and tax increases were inevitable in this budget, Purcell said, as well as measures Perdue has implemented like furloughs for teachers and the use of lottery funds.

“The money just wasn’t coming in to pay the bills,” he said.

Purcell has supported reforming the state’s tax structure in the past, and said there is a provision in the budget that requires members of the finance committee to return to work on restructuring the state’s tax code.

A plan may come up in the short session or even in a special session of the General Assembly this fall, Purcell believes.

Purcell also said there was a large bi-partisan meeting on the subject in Raleigh last week.

“I think it is important to restructure taxes in the state, and I believe that we will do that as soon as September,” he said. “I’m glad we’re not a California, but I think this budget is going to really make people take a look at how we bring money in and spend it.

“The fact of the matter is, when you’ve got to make these big cuts, you have to cut education and health and human services,” Purcell said at another point. “They’re both just too large a part of the budget not to be cut.”

Along with cuts to Health and Human Services, cuts to other departments will also result in job losses and the elimination of vacant positions.

Lawmakers planned an initial vote on the proposed budget as early as Tuesday, but would have to be voted on again Wednesday to be sent to the Perdue for her signature.