Perdue's speech expected to balance hope, grim reality

Raleigh, N.C. — North Carolina's economy is certain to get top billing in Gov. Beverly Perdue's "State of State" address Monday night as the state tries to plot a path through the deepening recession and forecasts of shrinking revenue.

The latest projections call for a $2.2 billion deficit through June and a shortfall of more than $3 billion in the fiscal year that starts July 1. Perdue already has ordered state agencies to reduce spending by 9 percent, and more cuts are expected in the coming months.

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Observers said they expect Perdue to deliver a "big picture" speech that isn't packed with a lot of specifics. Her main challenge, they said, will be balancing cuts with a sense of confidence.

"I think, in several ways, it's the most important speech she's given," said Jack Betts, a political columnist with The Charlotte Observer. "She now suddenly has to figure out how to pay the freight or let that freight go."

Perdue will face two audiences while speaking: lawmakers and the general public.

Sen. Neal Hunt, R-Wake, said he wants to hear about long-term changes, not quick fixes.

"(We need to) do some drastic cutting on expenditures," Hunt said. "I'm pretty encouraged how she's acting. Now, we're going to see where her policy is."

Perdue spokeswoman Chrissy Pearson said the governor would use the speech to lay out her priorities.

"She will talk about education. She will talk to us about job creation," Pearson said. "She will talk about (the fact that) there will be cuts. There will be some pain, but the broader picture you will see – the broader message that she will give – is we will work together. We will get through this."

Democratic consultant Gary Pearce, who helped former Gov. Jim Hunt craft several State of the State addresses, predicted Perdue would hold back on specifics and instead focus on building the public's confidence.

"If she gets into specifics – budget cuts, tax increases – she just sort of mobilizes the critics, and they have more time to shoot at her," Pearce said. "Her job ... is more to show that she's got a plan, that she's up to the challenge and she believes the state can meet the challenge."

Perdue is expected to send her proposed budget to the General Assembly next week.