Perdue to lawmakers: Pass budget now

RALEIGH, N.C. — Gov. Bev Perdue has sent a strong message to lawmakers working on a state spending plan that was due Wednesday: Pass a budget, now.

"The bottom line is they've got to stop this tit for tat, and they've got to come together on either a short-term or long-term decision," Perdue said Wednesday afternoon. "We shouldn't be bogged down over the things that make state government function for our citizens."

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Perdue calls for faster budget negotiations

Lawmakers, in recent days, have been at a stalemate over how to generate more than $1 billion in revenue for the new fiscal year to help lessen the severity of state budget cuts resulting from a projected $4.6 billion deficit.

Under state law, a balanced budget must be approved by June 30 to avoid a government shutdown.

The General Assembly barely avoided that by passing Tuesday a continuing resolution that keeps state departments and services running at no more than 85 percent of what was allocated in the past fiscal year's budget.

Legislators now have until July 15 to agree on the budget, but Perdue said Wednesday the state stands to lose $5 million a day because there are no program cuts and no new revenue is being generated.

Both the state House and Senate have agreed to $990 million in additional revenue in fiscal 2009-10 and $1.3 billion in the second year of the budget. But Perdue has asked for $1.5 billion to avoid drastic cuts to education.

The Senate wants to lower the state sales tax and to tax more services, such as auto repair, lawn care and home improvement. The House wants to increase sales taxes and raise income taxes on couples making more than $200,000 a year.

Once lawmakers agree on how to generate the money, they must still decide where it goes. Many have said it should go to education and the Department of Health and Human Services, but there is disagreement there, as well.

Perdue has been vague on a tax plan but said Wednesday that she supports a combination of tax increases, including sales upper income, alcohol, and tobacco to protect public education.

She said she also backs reform efforts to tax some services, but in the interest of reaching a deal now, she said, that might have to wait.

Earlier this year, Perdue tried to help close the budget gap for the 2008-09 year through canceled contracts, slowing the growth of some state programs and pay cuts and flexible furloughs for state workers.

"I don't anticipate having to furlough anybody ever again this calendar year, if I can get a budget out of the General Assembly now," she said. "Now, if it's Christmas, come back and ask me the question, again."