A budget debate rife with questions over how to make up in excess of a $1.5 billion shortfall invited questions over where new taxes should be assessed and what programs should be cut.
The state finally settled on a budget which raised $1 billion in additional fees and taxes and cut $2 billion in program. It happened only after Gov. Bev Perdue roundly rejected the first proposal.
State Sen. Bill Purcell and Rep. Melanie Goodwin both said they had serious concerns about the budget, but threw their support behind it.
The process was prolonged because just how much money there was to spend remained a moving target, Purcell said.
“I think we would’ve been through a lot earlier this year if we hadn’t faced constant changes in projected revenues,” he said.
The Budget
“It’s not what I’d like to do, but it’s what I feel we can do,” Purcell told the Daily Journal before the Senate’s vote on the final proposal.
He said the shortage of available funds made this budget stand out among others he’s been involved in tabulating.
“This has been a very arduous session because of the tension and frustration with our decreasing fund availability as a result of the national economic trends,” Goodwin said earlier this week.
She explained when lawmakers sat down at the table, they were told they were dealing with $2 billion less than they had last year.
“By the end of the first quarter, we learned it was more than double the anticipated
deficit,” she said. “We made very difficult, gut-wrenching cuts to services that will
affect real people and real families in our district.”
Limited Resources
“Obviously, it is much easier to budget when funds are available,” Goodwin said. “They were not available this year, and the General Assembly has a constitutional obligation to balance the state’s budget. So we acted responsibly: We cut where we could and raised revenue and used federal stimulus money to fill in some of the deepest cuts to preserve critical health and human services programs and education.”
Purcell pointed out stimulus money was hardly enough.
“We’ve got major financial problems here, even using ($1.3 billion in stimulus funding),” he said. “Even with that money we’re still making these Draconian cuts. I don’t think people understand how major this recession really is.”
Being that he sits on the Health and Human Services Committee, Purcell was particularly alarmed by the 20 percent reduction in the department’s budget from the previous budget. It represented a fifth of what was spent on services in that spending plan.
Cutting Medicaid also meant the loss of the matching federal funds, Purcell pointed out, meaning the state really lost $2.5 billion in services for its citizens.
“I think every legislator, if given their own red pen, would balance the
budget differently based on their district’s priorities and their own moral
imperatives,” Goodwin said. “But the process requires a majority of votes in both chambers (of the General Assembly).”
Never Again
Purcell saw some light in the state’s budget, in that it included a provision requiring members of the Finance Committee to come back in the fall and work on restructuring the state’s tax code.
Purcell said the economy of North Carolina is in a state of transition from a production- and agriculture-based market to one that is now driven by service industries.
He believes the state must reform the way the state collects money to reflect these changes.
“I think it’s important to restructure the tax code, and I believe that we will do that as soon as September,” Purcell said.
The new budget added taxes on computer downloads, as well as a one cent hike on state sales tax, which appears to be a step in that direction.
"State Sen. Bill Purcell and Rep. Melanie Goodwin both said they had serious concerns about the budget, but threw their support behind it." (taken from the aritcle above)