Perdue budget would raise sales tax, increase education spending

Posted May 9, 2012

State budget

— 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. 

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  • ctnorris2011 May 10, 2012

    Isn't she gone yet, she has done nothing but cause the NC economy to dip lower and lower her entire term. I say Good Bye Bev, I hope the door hits ya where the good Lord split ya!!

  • Preebok May 10, 2012

    The chirren, LOL! Increase the tax on the people WITH CHILDREN! Or quit giving the tax refunds for Dependents (for children). Why do they get credited? If you can't afford 'em, don't have 'em.

  • Riddickfield May 10, 2012

    Wait! I thought this is what the education lottery was for! the chirren!

  • tjdebord May 10, 2012

    She's trying to go out swinging, but she has no club left.

  • Nancy May 10, 2012

    "Sure there are. I'd just like to see them. It's common sense. All things being equal, the best results are in the states that pay more."

    Here you go:


  • commonsenseisn't May 10, 2012

    We do not need a tax increase. We need to use common sense. Cut spending. Starting at the top. College chancellors, presidents and professors are over paid in NC. A professor that is paid $688,000 a year? A community college president that is paid $334,000 a year? A NC State chancellor that is paid $420,000 a year and has to live in a new $3.5 million mansion?
    No person being paid from public funds should be paid more than the President of the United States.
    Stop wasting our tax dollars. Show us that you can live within your means. If you want something new, save for it. Don't just add another tax.

  • common_sense_plz May 10, 2012

    We just cant handle anymore taxes on anything. The state gets enough money from tax payers and the lottery. It is time for them to cut their own salaries and benefits. If they look hard enough they can find the money without raising taxes on anyting. We are already struggling enough as it is.

  • curlyq619 May 10, 2012

    storchheim...I teach in the public education system. Do you have a problem with that?

  • maybelle May 10, 2012

    OH yeah take back the retirement for Reps & Senator who only spend 4 years in state government. Paying John Edwards retirement is not funny anymore.

  • maybelle May 10, 2012

    If you don't have jobs you can not pay for education. So many people are not listed as unemployed because their benefits have run out, the people not drawing UIB are not counted as unemployed. WAKE UP NC we need jobs