Last year, Gov. Bev Perdue rejected a two-year budget proposal from the Senate and House of Representatives in the face of a $3 billion shortfall, before reaching an agreement about a month and a half after budget planning usually reaches a conclusion.
With stimulus money figured in, about $1.5 billion was lopped from state spending. This year, lawmakers are being asked to continue the cut backs as the state continues to weather the economic downturn.
Tuesday, Sen. Bill Purcell said citizens shouldn’t have to wait until July to know what strategies will be adopted, and for local governments to know what they’re getting from Raleigh for their own budgeting processes.
“There’s a lot of interest in getting things done early this year,” he said. “I expect the budget to be finalized by June 1. That makes it easier for everybody because it’s the beginning of the (fiscal) year.”
The budget is now in the Senate’s hands, and Gov. Perdue has already offered her own plan for 2010-11.
Her plan is reported to include about $1 billion in cuts, roughly half of which come from public schools, community colleges and the university system.
Purcell said her plan has little chance of making it through the Senate and House without changes, though, with some of her education spending remaining a target.
Local officials estimate Perdue’s cuts will take away about 4 percent of the county schools’ state funding for K-12.
“One thing the governor has proposed is salary increases for teachers, but at the same time schools are going to have to let teachers go,” Purcell said. “So, I’d be surprised if that’s going to go anywhere.”
As Purcell spoke, Charlotte-Mecklenburg Schools were preparing letters with warnings of coming lay-offs for 500 teachers that face losing their jobs, according to reports from The Charlotte Observer.
Last year, state income tax revenues came in at 40 percent below projections.
This year, the numbers haven’t yet been released, but Perdue seemed encouraged by them while announcing the arrival of the Plastek Group in Richmond County last month.
Purcell said he’s been hearing rumors they are 5 percent below projection this year.
He is the co-chair of the Senate’s Health Human Services Committee, and said they proposed their own departmental cuts to Senate leadership Monday.
“We’re trying to do things to deal with Medicaid fraud, and make sure the limited funds we have are being spent on what we intend them for,” Purcell said. “We’re also going to be looking at cutting some personal care services, while trying to pay for those services that are really needed.”
He said home health care services like bathing and toilet assistance are in no danger of being gotten rid of, but some of the frills definitely have to go.
“I had one citizen call me upset because no one is going to be able to take her shopping,” Purcell said. “Your heart goes out to them, obviously, but we just can’t afford to pay for those things anymore.”
He said other cutbacks could come in programs that were funded with non-recurring funds last year, but programs like food banks, adolescent pregnancy prevention, Special Olympics, stroke prevention, heart disease prevention and others are being held onto by the leadership.
“A lot of the cuts are going to be vacant positions in HHS that departments haven’t filled,” he continued. “... There will actually be some real jobs that are cut, though. There’s no getting around that.”
Some non-profit watchdog groups are also sounding the alarm on North Carolina’s budget situation.
Last month, the left-oriented N.C. Justice Center issued a report predicting a $1.6 billion shortfall in the 2010-11 budget, and anywhere between $3.3 and $4.4 billion in 2011-12.
Earlier this week, Raleigh-based conservative think tank the John W. Pope Civitas Institute warned of a “fiscal tsunami” threatening the state budget.
“Crippling state debt and unsustainable monetary commitments are painting a bleak financial picture as the General Assembly returns to Raleigh this week according to a new study released today by the Civitas Institute,” began Monday’s press release.
They predict a $4.3 billion budget shortfall “over the next 26 months, and a $2.9 billion drop-off in revenue for fiscal year 2011-12 as federal stimulus money is set to run out.”
More liberal institutions are calling for “a balanced approach” of cuts and tax increases.
Purcell has called for restructuring the state’s tax system to depend more on revenue from services, and eliminate personal and corporate income tax.
This proposal has the support of N.C. House of Representatives Democratic candidate Ken Goodman who is seeking Richmond and Montgomery counties’ seats, but Purcell said it is unlikely any meaningful reform will come until after November’s General Assembly elections.
Staff Writer Philip D. Brown can be reached at (910) 997-3111 ext. 32, or by e-mail at pbrown@yourdailyjournal.com.
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