State News

Easley to propose budget for Legislature's short session

Posted May 11, 2008
Updated May 12, 2008

— Gov. Mike Easley plans to hold a press conference Monday morning to announce the budget amendments that he will press the General Assembly to pass in the short session that begins Tuesday.

Watch Easley propose his budget at a press conference LIVE at 11 a.m.

No landmark legislation – such as the 2005 state lottery, 2006 ethics rules and 2007 Medicaid spending – awaits lawmakers, but they face pressure to deal with thorny issues, such as reform of the state's mental-health and probation systems, while tinkering with the budget.

"I do believe there will be some legislative debates designed for show," said John Hood, president of the conservative John Locke Foundation in Raleigh. "I don't think any substantive, complex legislation will pass."

It all starts with the budget. The state is on track to collect more revenue than was projected for the fifth consecutive year, but legislative analysts and Gov. Mike Easley's office agree it will only be about $150 million – or less than 1 percent of the $20.7 billion budget that runs through June 30.

That figure is well below the more than $1 billion extra that lawmakers had to play with in both 2006 and 2007. And even when the coffers were flush, leaders in the House and Senate always take to the art of dissuasion to keep short the line of colleagues and advocacy groups seeking money for new initiatives.

"We do have a lot of competing needs and a lot of competing expectations, and so I've been busily (damping) down expectations (with) whoever I've been meeting with, because we want to leave the state in good fiscal condition and continue our fiscal stability," said House Speaker Joe Hackney, D-Orange.

Senate leader Marc Basnight, D-Dare, was more blunt: "We have very little money this year."

Easley is expected to press for any extra funds to go towards pay raises, teacher performance bonuses and $42 million in additional fuel costs for school buses. The pay raise for teachers is necessary for Easley's pledge to raise teacher salaries above the national average by the time he leaves office in January.

Every 1 percentage-point salary increase for all state workers, including teachers, costs about $130 million.

Easley will also propose more money for the state's struggling mental health system and money to increase staffing within the state's probation and parole offices.

Easley acknowledged that those initiatives will call for millions in additional funds and plans to call on state agencies to make spending cuts. Easley budget adviser Dan Gerlach said those cuts will amount to "several hundred million dollars" in cuts, but overall state spending will grow by about 4 percent.

"It's going to be a tough session," Easley said last week.

The largest single financial choice on the table this session will be whether to offer voters two statewide bond referenda to pay for transportation projects and university projects – estimated at around $2 billion apiece.

Basnight, Hackney and Easley formed a blue-ribbon transportation panel several months to assess the state's highway and public transit needs and come up with recommendations.

The commission, which will make recommendations to the Legislature a few hours before it reconvenes at noon Tuesday, is expected to propose both the bond package and an end to the $172 million transfer of automobile-related taxes and fees the state's Highway Trust Fund to the general operating budget.

"The logic of a transportation bond is hard to dispute given massive needs we have and the opportunity to try and get in front of inflationary factors," said Beau Mills, chairman of NC Go!, a coalition of local governments and road-building trade groups. "The big question is whether the short-session legislators are going to be willing to take this on."

Republicans support the bond, to be paid for with the money from the Highway Trust Fund.

However, in separate interviews, Hackney and Basnight questioned whether such a bond package will pass this year. Easley will not offer a bond proposal in his budget.

"Without another revenue stream, which we don't anticipate on either transportation or education, it's hard to see where you could do a big, big bond package," Hackney said. Basnight, meanwhile, said a small road-building package may pay for very little and may not benefit the state as much as a bond package for universities.

The GOP wants to vote on ending the state's de facto death penalty moratorium, extended by legal battles over the role of a physician should play at executions. Senate Minority Leader Phil Berger, R-Rockingham, said they also want debate on legislation that would make it a separate crime to kill the unborn child if a pregnant woman.

Republicans, who hold the lowest number of seats at the Legislature in a decade, though, will likely struggle again to pass be heard on policy unless they're working with strong bipartisan support.


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  • Armando de Cabana Boy May 12, 2008

    Easley is always ready to throw money at teachers, but not state employees.

  • OLD PIRATE 2 May 12, 2008

    Gov. Give-A-Way will want more of your money to entice people to vote for the party. Never has had the interest of the state in mind. Follow the cash...Head Start (political organization)DOT (Free money to cities that support the Gov.) Its time for NC to be responsible to the people who pay the bills... NO more surveys of roads, fit them, no more surveys on education, expect performance and get Washington out of our schools.

  • Stormy13 May 12, 2008

    It does no good to complain about raises for State employees cause we are going to get the "shaft" no matter what like we always do!

  • charlesboyer May 12, 2008

    "The Democratic leadership in our state has failed us."

    Amen. And this budget is pandering to a special interest group in an election year.

    Given the sharp rise in gasoline (22% in one year) and the increase in prices in food and other necessities, it is ridiculous for Easley to focus any raises on just one interest group, namely, teachers. The rest of the state's employees have to feed their families and drive to and from work too.

    That may not be a popular stance with the NCAE or teachers generally, but the simple fact is that they need to share the burdens of these tougher times equally.

  • Garnerwolf1 May 12, 2008

    It wasn't $150M, it was $90M. And that was the amount over the estimated (read 'educated guess') amount for the period. They knew revenues would likely be down given the economy so it was a very conservative estimate - so it's not like they found a $90M bill blowing down the street. With that said, cuts can always be made - but as with any single dollar the state spends, there is one group saying it is the most important and one group saying it's the most wasteful. Don't count on state employees getting much, if any, raise.

  • packandcanesfan May 12, 2008

    Well if there is "very little money this year", ALL state employees better get the same raise. The rank and file, teachers AND the legislative staff. The cost of everything is through the roof and they should all be treated equally. I have family members that work for the State and I know their daily struggles.

  • Bubba-Louie May 12, 2008

    I think they should give all state workers a 5-10% cost of living raise. It is getting very exspensive to put gas in our cars and to feed our families.

  • fl2nc2ca2md2nc May 12, 2008

    "We do have a lot of competing needs and a lot of competing expectations, and so I've been busily (damping) down expectations (with) whoever I've been meeting with, because we want to leave the state in good fiscal condition and continue our fiscal stability," said House Speaker Joe Hackney, D-Orange.

    Senate leader Marc Basnight, D-Dare, was more blunt: "We have very little money this year."

    What a joke! If we have very little money this year, and I believe there was just a story about a $150M or so in unexpected revenue, it is because they have blown over $2 BILLION in surpluses over the last couple of years. The worst part is that they instituted programs with that $2B that will require additional funding from here on out. That was totally irresponsible and unacceptable.

    The Democratic leadership in our state has failed us. It is time for change but I'm not counting on the citizenship in general to have a clue what is going I'm not holding my breath.

  • whatelseisnew May 12, 2008

    what they need to do is cut 10 percent from everything except DOT. Then take that savings and put it into roads and bridges. No tolls.