The budget reduces state spending by more than 3 percent, while leaving escape routes on another $518 million in case the federal government doesn’t come through with Medicaid funding beginning in January.
Perdue said the cuts will total more than $1 billion, but the overall plan does more for job creation and economic recovery.
“I signed a budget today that does more with less, but still keeps North Carolina moving forward toward a full economic recovery,” Perdue said. “This year was tough, but next year will be tougher. This budget puts our state on firm ground as we head towards the challenges of the next year.”
Legislators beat the clock this year, getting the budget signed before the start of the fiscal year on July 1. That means many county agencies that depend on the state for funding will know what they’re going to get.
N.C. Sen. Bill Purcell said he felt good about the budget.
“Considering what we had to work with, this is a good budget,” Purcell said. “We protected education, and while there were some cuts to (Health and Human Services), we included some pretty strong tax incentives for small businesses to create jobs. Throughout this process, jobs has been the number one concern of many here in Raleigh, and certainly my number one concern.”
According to Perdue’s release, more than $200 million is provided “for several key investments around assistance to small businesses and infrastructure that help sustain or create 20,000 jobs over the next three years.” It allocates $58 million to establish the North Carolina Mobility Fund for transportation improvements and $34 million in tax relief on unemployment insurance contributions.
The statewide unemployment rate was just below double digits in May, at 9.9, but more than half of the state’s counties had rates at or above the 10 percent mark.
Last year, the General Assembly estimated its budget shortfall at $4 billion, which was reduced by non-recurring stimulus funding. This year Democrats in Raleigh estimated the shortfall at about $800 million, with an additional $518 million in federal Medicaid money as of yet unallocated.
Purcell, who co-chairs the Senate’s Health and Human Services Committee, also pointed to a $1 million increase in funding for the state’s food bank program, a $450,000 increase in a stroke prevention program and moves to eliminate Medicaid fraud as progress that was made in the budget.
“With home health services, we also moved to ensure that the people who need it most get it,” Purcell said, acknowledging cuts to home health services have been a sticky issue. “I think there are a lot of good things in this budget, and overall I’m pleased with what we were able to accomplish facing a shortfall of $800 million.”
Earlier this week, N.C. Rep. Melanie Wade Goodwin said the state “is facing tough economic times. There isn’t a lot of money to spread around, and what we do have must be invested in ways that are targeted and efficient.”
She said House Democrats had a four-pronged plan going into the budgeting process to create and expand job opportunities, support small businesses, protect education at all levels and strengthen the public’s confidence in its elected and appointed leaders.
Perdue is calling her accountability efforts “setting government straight.”
“Job creation is the biggest challenge for us at this time,” Goodwin said, explaining government can’t hire people at private businesses, but can make conditions for hiring more favorable. “This proposal (since approved) does that with $34 million in tax credits based on how much unemployment insurance a company pays.”
She said this provision applies to about 125,000 businesses that gross less than $1 million.
“We have also provided money to keep jobs in our poorest counties,” Goodwin continued. “There is money for regional economic development groups and statewide marketing initiatives. We continue to invest in programs to help rural communities like Richmond County retain jobs. It is a comprehensive approach to job development, and I believe it is one that will help the state continue to recover.”
Perdue’s release also lauded allocations such as $12.5 million for the One N.C. Fund. The program was instrumental in landing The Plastek Group for Richmond County earlier this year, $10.5 million to bolster biotech, biofuel and green jobs in the state and $3 million to match private monies through the Rural Center’s Home Grown Jobs Initiative.
Goodwin said 57 percent of the roughly $19 billion spending plan is dedicated to education.
A House move to capture lottery funds to keep teachers in the classroom is credited with saving 1,600 teacher jobs, though Richmond County is unaffected by it.
“We fully funded enrollment growth at community colleges so they can continue to train displaced workers for new jobs, as well as help those students working toward degrees,” Goodwin wrote. “We also increased financial aid in the university system by $8 million to help more of our financially struggling families access higher education.”
“Despite all (these cuts), North Carolina is one of seven states that maintained its AAA bond rating,” Purcell said. “We still have money in our rainy day fund - though it’s not what we’d like it to be - and we continue to have one of the best-funded teacher and state employee retirement funds in the nation. There’s no doubt we’re facing tough times, but I think we’re in good shape moving forward.”
He also said the short session of the General Assembly is likely to wrap-up around the end of next week.
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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