Local News

State Lawmakers Face Budget Problems

Posted May 6, 2003

— Gov. Mike Easley and state lawmakers are bracing for some serious budget problems.

Tax collections are coming in short, and citizens will pay to help balance it all out. The only question is whether it's through more taxes or through cuts to state services.

Revenue collections for April were about $100 million below state budget estimates. That shortfall could quadruple by summer. Tuesday, Gov. Easley told a meeting of the state's top elected officials that he's ordering state agencies to cut their budgets five percent.

"Moving from 3 1/2 percent to five percent those 55 days will mean a lot of purchases won't get made," Easley said. "Some hikes won't take place. Traveling won't take place."

The Governor said additional budget cuts to state agencies are the best way to ride out the tax troubles. State lawmakers aren't so sure.

Right now, the House budget cuts services to make up for the shortfall. The Senate wants to delay repealing tax breaks.

Rep. Paul Luebke, a Durham County Democrat, wants budget negotiators to consider raising taxes on cigarettes or beer and wine rather than additional budget cuts.

"I certainly would support any initiative that someone might make for a 20-cent cigarette tax," Luebke said.

State budget officials expect the total budget shortfall could reach $283 million after May and June collections are reported. That's in the 55 days left in the fiscal year that ends July 1.

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