New fiscal year, Perdue warns lawmakers

RALEIGH — Gov. Beverly Perdue put pressure on legislative leaders Wednesday to approve a final budget for the new fiscal year as soon as possible with a tax plan that will prevent more job losses or furloughs.

Perdue told reporters the Legislature’s two-week stopgap spending measure she signed into law Tuesday still prevents state government from realizing several million dollars in expected tax increases and cost savings every day.

Every bit counts as House and Senate leader assemble a two-year state government spending proposal that’s likely to spend $18.8 billion in state funds, or $2.5 billion less than what was budgeted last year before tax collections plunged by a record amount.

North Carolina is one of only seven states experiencing delays or that had to extend their sessions to deliberate on their budgets, according to the National Conference of State Legislatures.

“My message to the General Assembly on July 1 is pretty in your face: they need to act quickly and focus on the core services,” Perdue said outside the old Capitol building. “They’ve got to act to protect education ... they’ve got to raise some revenue.”

Perdue’s fellow Democrats at the Legislature said they were working on putting together a plan but the House and Senate remain far apart on how to collect an additional $1 billion in new revenues this coming year.

But missing the deadline to assemble a budget isn’t surprising. A budget bill hasn’t been signed on time since 2003.

“We’ve done this year in and year out,” Senate leader Marc Basnight, D-Dare, before going to visit Perdue late Wednesday. “We’ll get it done as quickly as we can.”

Added Rep. Jennifer Weiss, D-Wake, one of the House’s chief tax negotiators: “We need to reach an agreement as soon as possible and we’re committed to doing that.”

Perdue sounded ambivalent about competing House and Senate revenue packages except that more tax money is needed so public school teachers know whether they’ll have jobs this fall. She wants extra money to prevent class sizes from being increased, which could eliminate funding for 6,000 positions.

She said she would prefer a short-term revenue fix that could include a mix of increases on sales, income and cigarette taxes.

She’s willing to accept expanding the number of services that would be subject to the sales tax, but would prefer a more dramatic tax overhaul like the plan of Senate Democrats to wait until 2010 or 2011.

“I continue to say we must have overall tax reform and it’s got to be done in an open and very engaged process where people and individuals and communities across the state can find out who the winners and losers are,” Perdue said. “That has not happened.”

Perdue said she believed a new budget also would eliminate the need for additional furloughs for state employees, at least through the end of December.

Nearly all state employees saw 0.5 percent pay decrease in May and June so that Perdue could generate enough at least $3 billion in savings to balance the budget by Tuesday, as required by the state constitution.

“Last night was really dicey. We’ve paid all the bills thus far,” Perdue said. “I pray we can get to the end.”

Text Only