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Perdue skipped some options to balance budget

Posted February 18, 2011

State budget
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— When Gov. Beverly Perdue rolled out her proposed budget for the next two years on Thursday, she said she used a combination of 72 percent cuts in spending and 28 percent additional revenue to balance the budget.

Her $19.9 billion spending plan for the 2011-12 fiscal year, which starts in July, includes a mix of consolidating state agencies, eliminating programs and jobs and continued taxes.

"We're making tremendous cuts, but we are also making investments to preserve our core, which is jobs and education," Perdue said.

The choices she and her staff made in recent weeks are similar to those being made in state legislatures nationwide as different states try to tackle their deficits.

Wisconsin, California, Maryland, Michigan and Nevada, for example, are pushing pay cuts or furloughs of state workers. Perdue avoided those choices but chose to freeze the pay of North Carolina government employees, lay off 3,000 workers and eliminate another 7,000 vacant positions.

"Public employees are always the ones that politicians look to blame," said Dana Cope, executive director of the State Employees Association of North Carolina.

"Looking at layoffs versus pay cuts or furloughs, (layoffs are) a more permanent way of cutting the budget," said Edwin McLenaghan, a public policy analyst with the North Carolina Budget & Tax Center.

Republicans lawmakers criticized Perdue's decision to extend a temporary sales tax that is scheduled to expire in June. She called for rolling the penny increase back to 0.75 cent.

"We intend to balance the budget without raising taxes," Senate President Pro Tempore Phil Berger said Thursday.

Perdue also wants to raise more from the state inheritance tax by lowering the threshold from $5 million to $1 million. The move would generate $100 million for the state in the 2011-12 fiscal year, according to her budget projections.

Perdue's proposed 2011-13 budget Perdue skipped some options to balance budget

Other states looking at tax increases include cash-strapped California, Connecticut and Minnesota.

States like Florida, Iowa, Michigan and Maine are echoing Perdue's call to reduce corporate income tax rates. She said cutting North Carolina's rate from 6.9 percent to 4.9 percent would create 10,000 jobs over the next three years.

The governor and legislative leaders said they don't plan to tap into video poker and sweepstakes machines for revenue, unlike Florida, Iowa and Ohio, which plan to expand state-run gambling to raise revenue.

Tax reform advocates in North Carolina said they are disappointed that neither Perdue nor lawmakers want to look at broadening the tax base to include a sales tax on services to solve the state's budget problems.

"By implementing modernization, by broadening bases and lowering rates, you improve the stability of tax revenues," McLenaghan said.

Instead, the new Republican-led legislature plans to close a projected $2.4 billion deficit by cutting more government jobs and programs than the cuts suggested by Perdue. They said they intend to finish their budget by June 1.

9 Comments

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  • Sherlock Feb 21, 11:56 a.m.

    She cut other peoples jobs before she cut her pay, Now that is great leadership.

  • FromClayton Feb 21, 11:46 a.m.

    hey how about that tobacco tax? I'm all about that. NC already pays far less than other states. Let's at least bring it up to even.

  • bracksdad Feb 21, 10:04 a.m.

    How do you estimate inheritance tax? What a crock that is anyway. Re-tax money that has already been taxed, just because a familty member dies. If she just made EVERYONE pay taxes, she would have plenty of money to waste, I mean't spend.

  • driverkid3 Feb 21, 8:47 a.m.

    She needs to add herself to the list of people that will have salaries cut. Let her pay for her own perks also. This woman has absolutely NO idea how hard the normal people have it.

  • lilluke0 Feb 18, 7:45 p.m.

    This is crazy, our Governor(Bev)needs to look under the table and pull out some of these big time money makers and apply some furloughs to their checks or freeze their salaries!! Leave our underpaid state worker alone we can't make it as it is. She should go after the ABC stores and the State lottery's pocketbook, if they can pay themselfes there is a lot of money right there to tap into with no problem. I say start at the top where the money really is! Mr.President said at the start of our recovering from this downturn we will not help the ones that are living above their means, that in it self applies to most if not all big company CEOs. Lets not stop there because this can also apply within the Government public and private employees! I see a rise in crimes because some have given up hope being turn down at every turn.
    02182011

  • quaten Feb 18, 7:04 p.m.

    "...and eliminate another 7,000 vacant positions." That's the low hanging fruit - which is a no-brainer.

    "...By implementing modernization, by broadening bases and lowering rates, you improve the stability of tax revenues..." - simply means finding creative ways to introduce new avenues of taxation. what could they be? What remains yet to be taxed? Hmmm...

  • Humungous Feb 18, 6:48 p.m.

    What a great opportunity for the GOP. She's so crooked she is now fully qualified to switch parties.

  • doglover11 Feb 18, 6:41 p.m.

    When she is looking at freezing salaries, she needs to remember to freeze legislative staff salaries as well. They get raises every year and they get DOUBLE digit ones (and hide it until someone digs out the info for WRAL or the N&O or other news sources). While the rank and file get nothing. If you say you are freezing all of them, do it. I have family members that work for the State and the school system and I am tired of seeing all the differences being made.

  • mrcrosbys Feb 18, 6:21 p.m.

    If she could have balanced the budget and neglected to do so, she needs to be impeeched immediately