Lawmakers call Perdue's budget 'starting point'

"This is a starting point," said Sen. Linda Garrou, D-Forsyth, co-chairwoman of the Senate Appropriations Committee.

Fiscal analysts have projected a $788 million deficit for fiscal 2010-11, which starts in July.

Perdue's proposal would lower overall state spending by about $400 million from fiscal 2009-10, which ends in June, and would use more than $500 million in federal funds to plug gaps in the budget. Most state agencies would have spending cut an additional 5 to 7 percent – education would be cut less than 4 percent – and more than 600 state jobs would be eliminated under the plan.

The governor said Tuesday when she released the spending plan that her priorities were on creating jobs, education, safer communities and reforming state government.

Most lawmakers agreed that there are many more losers in Perdue's budget than winners.

"I think it's a little disingenuous to say we're doing a lot to provide more for education when the largest single cut in the budget is going to our K-12 system," said Sen. Richard Stevens, R-Wake.

Perdue's plans to invest millions to boost the state economy got the best reviews from lawmakers. Her plans include providing a tax credit of $250 per employee to small businesses that provide health insurance to their workers and creating a $15 million incentive fund to encourage small businesses to hire people who have been unemployed for at least two months.

"We desperately need jobs. If we can turn some of these dollars to creating real jobs, that'll be the winner in this budget," said Rep. Jim Crawford, D-Granville, chairman of the House Appropriations Committee.

Lawmakers also picked at individual line items in the governor's budget, from cutting school supplies to eliminating personal care services for disabled people. Some expressed concern about giving teachers a pay raise but not other state employees, and others said they don't like the idea of repaying state workers for furloughs last spring because those employees already took the time off.

The governor said she cut $1 billion in spending in her budget, but both Republican and Democratic legislators said she did more shifting of money than cutting.

"In big terms, she's taken about 5 percent of the money and reprogrammed it somewhere else," House Minority Leader Paul Stam said.

"I noticed the numbers sort of equaled out, and I'm concerned about that," Garrou said.

Senior budget writers said they're concerned Perdue didn't go far enough to prepare the state for when federal economic stimulus dollars disappear next year. Also, millions of dollars in federal money the governor is counting on isn't

"I think we'll be looking real hard at the expansion dollars (for various programs)," Crawford said.

"I would be surprised if our budget were not lower than what the governor has in her recommended budget," Garrou said.