Raleigh, N.C. — Gov. Bev Perdue’s plan to cut the pay of state workers set off a firestorm of reaction. Perdue said Tuesday the one-half percent pay cut was necessary to help with the $3 billion hole in the state budget for the fiscal year which ends June 30.

As one year ends, another begins and state leaders are already anticipating that the funding gap in the next state budget will require more cuts.

As state employees like Stephanie Thompson digest the pay cut, they wonder if it is just the beginning.

“A lot of people are discussing, 'What's the next step?' What will happen after the fiscal year is over,” Thompson said Wednesday. Thompson works for the state Department of Commerce.

Sen. Linda Garrou, D-Forsyth, is the chairwoman of the Senate appropriations committee. “I'm afraid we may have to make deeper cuts, look for perhaps more salary cuts as the time goes along because we need to look at recurring dollars,” she said.

That is not the message state workers hoped to hear.

“Like anybody else, I'm nervous,” Kathy Robinson, an employee at the state Department of Revenue, said. “You don't want to keep losing money, but you hope you have a job.”

Legislators say with a growing budget gap, job cuts may be difficult to avoid.

“We're very well aware of the dilemma all private businesses are in. We may be put in that position also,” Garrou said.

The governor said she planned to borrow $400 million of federal stimulus money designated for next year’s budget to balance the budget in the current year.

“She's created, by doing that, an additional $400 million hole (for the 2010 fiscal year) that will need to be resolved somehow,” Senate Minority Leader Phil Berger, R-Rockingham, pointed out.

Both sides of the aisle acknowledge deep cuts are inevitable.

“It's not gonna be easy,” Sen. David Hoyle, D-Gaston, chairman of the finance committee said. “It's gonna be very, very difficult and it's gonna be very painful for a lot of people.”

Pam Pope has been a state employee for 25 years. “I worry about my job as well as others,” she said.

More details are expected as the budget process continues. The next fiscal year begins July 1.