Wednesday, February 02, 2011

Perdue: 'Senate cuts go too far'

For weeks the new Republican majority and Gov. Bev Perdue have been making nice about the upcoming job of trimming the 2011-12 budget by billions of dollars to cover a projected $3.7 billion shortfall. Yesterday the Senate announced it was moving toward giving Perdue authority to wrest $400 million in savings in the current fiscal year to get a head start on next year's savings.  Senate leaders really wanted $800 million in savings, but Perdue wanted to wait to see how the $400 million cut would affect this year's budget.

Meanwhile, the Senate Appropriations Committee this afternoon announced a plan for more cuts -- including taking $67 million billion from the money coming to the Golden LEAF Foundation (it still has $555 million) from a national tobacco settlement, $11.7 million from the Health and Wellness Trust Fund, $3 million from the Job Development Investment Grants, various unspent funds such as from  IT funds ($13.6 million) and the Parks and Recreation Trust Fund (8.5 million). Sponsors including Sen. Richard Stevens, R-Wake, said the cuts would get the projected starting deficit down nearly a billion to about $2.7 billion.

Perdue said Wednesday afternoon the cuts would make it hard to recruit jobs and expand businesses. In a statement this afternoon, she said:

“The proposed cuts to North Carolina’s jobs and economic development funds will damage our ability to recruit new jobs and to expand existing businesses in the state. Other Southern states, notably Virginia, have called for an increase in similar funds so they can take our jobs away.

 "I am truly surprised that Senate leadership is considering taking North Carolina’s jobs money as a way to balance the budget. It won’t work – and what’s more, our people won’t work if we can’t bring new companies and new industries to our state. We have many hundreds of new jobs in the pipeline right now, and they depend on that money. If we don’t win those projects, those jobs go somewhere else. It’s that simple.”

The legislature is off to a very fast start, and it is moving to make whatever cuts it can now to get a handle on the worse budget shortfall in memory.  No one disputes that covering the shortfall is going to cause some pain. The governor's reaction today to the advance cuts is just the first of a number of reactions to various cuts from those directly affected as lawmakers and the governor try to find the right formula to cut the budget. It's worth noting that Perdue did not say she was against all the cuts -- just the ones she thinks will affect the state's ability to recruit jobs.  Many Republicans, on the other hand, are doubtful that spending tax money on economic development is all that effective in recruiting jobs.

4:20 p.m. update  from Senate President Pro Tem Phil Berger's office:

“We are actively tackling next year’s budget shortfall through savings and reductions in the current fiscal year,” said Senate President Pro Tempore Phil Berger (R-Rockingham.) “These cuts represent immediate steps to help close the gap between spending and revenue.  While everything remains on the table, it is our belief these measures will minimize negative impacts to our classroom teachers and state employees.”


Anonymous said...

Per the today's headline, UNC just enrolled 25 fake students in its football team.
How many millions will UNC spend on the recruits instead of academics?

Anonymous said...

"$67 billion from the money coming to the Golden LEAF Foundation"

Are you sure it isn't 67 million? Because 67 billion would keep NC in the black for a long time.

Jack Betts said...

Thanks! $67 million it is. Fixed now.

Anonymous said...

If Gov. Perdue is concerned about a reduction in incentives for recruiting and expanding business, lower the tax rates. Theres the incentive. But, imo, she has a track record of defending every tax and tax rate while gov and reluctantly conforms to a balanced and lowered budget.