Perdue budget would raise sales tax, increase education spending
Posted May 9, 2012
Raleigh, N.C. — Gov. Bev Perdue is scheduled to release a $20.9 billion budget Thursday morning that will increase spending on education from pre-kindergarten through the university system by raising the state sales tax by three-quarters of a cent.
"She'll be investing in three primary (areas) for her budget – education, job creation and those who have served our country," said Andy Willis, who heads the Office of State Budget and Management.
Update: In a video released at 5:30 p.m. today, Perdue outlined many of the same budget priorities as her staff.
"We have reverse the deep and unnecessary education cuts that the Republican-controlled General Assembly forced on us in all 100 counties last year," Perdue said in the video.
She is scheduled to speak with reporters about her budget plan at 10 a.m. Thursday morning.
In a briefing with reports Wednesday, Willis and other administration officials outlined Perdue's plans for education spending. Graphs given to reporters by Perdue administration officials illustrate how her budget could return schools to the level of spending they had available in 2010 and 2011, prior to the current budget taking effect.
Perdue's budget would provide a net increase of $562 million to public schools, most of which would be used to eliminate flexibility cuts that school districts have had to make over the past several budget cycles. She plans to require local school districts to invest that funding in teachers, teaching assistants and other aspects of the classroom.
It's unlikely that the General Assembly would pass Perdue's budget in its current form. While Perdue, a Democrat, has called for raising taxes to offset education cuts, Republicans who control the General Assembly have resisted tax increases, saying they would harm the economy.
"I can't see that," said Sen. Phil Berger, the president pro tempore, when asked about Perdue's proposed tax increase. "I don't know how many times we need to say that's not a direction we're going to go."
Last year, Perdue vetoed the Republican budget. The General Assembly overrode that veto with the help of a few conservative House Democrats.
"The pain that we are currently feeling and the extent to which things will get worse next year is an argument in favor of increasing our investment in education," said Jon Romano, Perdue's communication director.
According to the background briefing, Perdue's budget will include:
- $503 million to reverse flex cuts to public schools
- $92 million to reduce class size in kindergarten through third grade
- $10 million for hand-held reading diagnostic tools
- $145 million to boost funding for universities, $35 million of which will go toward financial aid
- $53 million to boost funding for community colleges
Perdue is expected to release a video detailing her budget plan this afternoon.
In the fiscal year that starts July 1, public schools will lose roughly $258 million in federal Edujobs money, grants created in the Obama economic stimulus bill. Local districts have to use all of those funds by Oct. 1.
School districts used the federal funds to offset so-called "flex cuts," which were first instituted when Democrats controlled the General Assembly. A flex cut is money the school district hands back to the state after receiving its initial allocation to the General Assembly. Starting July 1, the annual flex cut was due to be $503 million across the state.
School superintendents have told lawmakers that it will be difficult to absorb both a planned increased to the flex cut and the loss of federal stimulus money.
Update: In a video released Wednesday night, Perdue highlighted some of her other proposals. They include:
- A tax credit for companies that hire unemployed workers.
- Programs to boost the film and clean energy sectors.
- Tuition assistance for veterans and dependents at North Carolina community colleges and universities.