Raleigh, N.C. — The slowdown in the national economy is trickling down to state budgets, and lawmakers from coast to coast are struggling to plug holes in their spending plans.
California's $22 billion budget gap, for example, is bigger than North Carolina's entire state budget. With housing woes and no income tax, Florida is working to fill a hole in its budget of more than $4 billion.
Likewise, Tennessee has no income tax and is looking to eliminate 2,000 state jobs through buyouts to balance its budget. Virginia and South Carolina also face shortfalls.
Meanwhile, North Carolina is finishing its fiscal year with revenue millions of dollars ahead of projections.
"We rank very well in there. A lot of states are not giving anything. A lot of people are laid off. They're not being able to give anybody raises now," Senate Majority Leader Tony Rand said.
Dan Gerlach, the top economic adviser to Gov. Mike Easley, said the state tries to keep its budget and tax forecasts conservative.
"We've had stronger job growth than other places. We're not immune to national issues, but certainly, our conservative budgeting has led us. We'll probably end with a surplus with other states deep, deep in debt," Gerlach said.
Still, Easley's critics said they don't see such a conservative stance in the way North Carolina spends tax money.
"I think the problem with that is that we continue to take more money out of the private economy than other states generally do," Senate Minority Leader Phil Berger said. "I think that hurts our overall economy. It may be good for state government, but I don't think it's good for the private economy."
Lawmakers said they don't plan on raising taxes this year.
If the state's economy falters, lawmakers also can tap an $800 million reserve fund as needed.










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June 18, 2008 1:51 p.m.
If there's a surplus in the general fund, then either that money should be saved for lean years, or income taxes should be reduced. That extra money should NOT be used to build or maintain roads. That what gas taxes are for. Things get messy when you start mixing the general funds and the road funds.
I'll repeat. Money for building and maintaining roads should ONLY be paid for through gas taxes, and gas taxes should ONLY go towards roads. Don't start moving money back and forth between funds. That's what happened in 2001 when money was diverted from the highway trust fund to the general fund, and it was a horrible idea.
June 18, 2008 10:18 a.m.
I don't understand people like you, whatelseisnew. I've told you this fact over and over, yet you never seem to investigate it to find out that I'm correct. Instead of doing a little investigation, you just keep spewing "the govmint is diversioning my's money, dagnabit!!!".
June 18, 2008 9:59 a.m.
June 18, 2008 9:54 a.m.
I wish I knew where that fella worked. Being in the private sector does not mean that you get a raise every year. With any given business there are lean times, and good times. Plus, nowadays many companies do not hand out raises just because they had a good year or several good years. Typically, they establish a pay range, much as the State does. If you are near the top of that pay range, it is not likely you will get a raise. At that point you have to move up or perhaps change the field you are working in to go to one that pays more money. I have not seen a pay raise in over five years. The company I work for has been making record revenue and profits during that time frame. (and no I do not work for any oil companies). In the meantime, my tax burden has increased substantially. Perhaps you deserve a raise. Clearly, there has not been equity in the percentage of increases for all state employees.
June 18, 2008 9:13 a.m.