Budget, schools ruling raise questions about Perdue's clout

Despite her demand Thursday that lawmakers "do the job you were elected to do" and pass a budget as quickly as possible, senators left Raleigh late Thursday and said they likely wouldn't return to budget discussions until next Tuesday.

House and Senate Democrats had crafted a plan to raise $982 million in extra revenue for the 2009-10 fiscal year, but the fragile agreement collapsed when Perdue criticized a provision to charge individuals and businesses who still owe state income tax at the end of the year an extra 2 percent.

Senate negotiators said a new budget is now likely weeks away as they search for ways to cut more from the budget and to more clearly spell out their plan to rewrite the state tax code and begin collecting sales tax on an array of services, from car repairs to lawn maintenance to manicures.

They will begin selling the plan to the public next week with an education campaign. Senators have contacted several people to speak about the concept of taxing services, including former Wachovia Corp. Chief Executive John Medlin and former Gov. Jim Hunt.

Meanwhile, the push for more cuts could further upset the delicate balance in budget talks.

"The cuts we've made are so deep that to continue to cut would be devastating to health and human services and education in a lot of places," House Majority Leader Hugh Holliman said.

Perdue also has cautioned lawmakers against cutting education spending too much. She continues to seek up to $1.6 billion in new revenue to avoid deep cuts, but lawmakers have refused to go along with her demands.

"I want to make every cut we can make before raising any taxes," said Sen. David Hoyle, D-Gaston.

Senate Democrats are adamant that any tax plan raise about $990 million in the 2009-10 fiscal year and about $1.3 billion the following year, Hoyle said.

The budget problems come on top of the decision of Perdue's hand-picked chief of the state school system to step down after losing a court fight for control of the Department of Public Instruction.

A judge ruled last week that, without a constitutional amendment, Perdue couldn't bypass elected Superintendent of Public Instruction June Atkinson to put someone else in charge of DPI. Bill Harrison, whom Perdue named schools chief executive in January, stepped down on Wednesday.

Political observers say Perdue has used up what little clout she has – public opinion polls have her approval rating at about 25 percent – and faces an uphill battle on all fronts.

"The education ruling has hurt the governor, clearly," said Brad Crone, a Democratic political consultant. "At this point in time, she's dealing from a very weak hand when it comes to dealing with the legislature."

"Most politicians who had a 55 percent negative and 25 favorable (poll approval rating) have not come back. Those numbers are deadly," said Carter Wrenn, a Republican political consultant.

Perdue spokeswoman Chrissy Pearson dismissed the notion that the governor is fighting for her political life. Perdue merely is using a different way of flexing her political muscle than people are used to, she said.

The governor, for example, convinced the House to add close to $1 billion in taxes to its budget proposal while protecting education spending, Pearson said.

Jack Betts, a political columnist for The Charlotte Observer, said Perdue has time to recover before the 2012 election, but she needs to start catching a few breaks.

"She hasn't been catching many yet," Betts said.