State News

Perdue's cost-cutting plan raises concerns

Posted December 10, 2010
Updated December 11, 2010

State budget

— A plan by Gov. Beverly Perdue to shrink government and privatize some operations made waves through the state government Friday as some expressed concerns about merging agencies and eliminating positions.

Perdue’s plan, announced Thursday, comes amid an anticipated $3.7 billion budget shortfall for the 2011 fiscal year – about $500 million more than was expected when the current year's $19 billion budget was approved last summer.

Most of the gap is caused by the loss of federal stimulus dollars and temporary taxes set to expire.

The governor’s plan to reduce that budget deficit would consolidate 14 Cabinet-level agencies into eight to improve efficiency and save an estimated $200,000 a year.

The Departments of Correction, Juvenile Justice and Crime Control and Public Safety would be combined into a proposed Department of Public Safety.

But Linda Hayes, secretary of the Department of Juvenile Justice and Delinquency Prevention, says that consolidating and trying to find the savings isn’t going to be an easy task.

”I think it’s going to be very arduous,” she said Friday. “I think it’s going to be one of those processes that I just can’t say, ‘OK, these two people have the same title – I can’t tell you that I can blend my HR director into the (Department of Corrections’) HR director, because we hire very differently. But I think there are similarities where I can do some savings on.”

Perdue’s overhaul plan draws concern Perdue’s overhaul plan draws concern

Advocacy group Action For Children said in a statement that it has concerns about merging "a child-serving agency whose mission is about prevention and intervention with departments that handle adult criminals and focus on punishment."

Incoming House Majority Leader Republican Paul Stam, R-Wake, believes the different groups will continue to be treated differently even under the same umbrella.

“Really, the only reason we had a separate department to start with is because one of the previous governors needed to make someone else a secretary and give them fancy offices,” he said.

Also under Perdue’s plan, the Employment Security Commission would merge with the Commerce Department and bring in the State Controller’s Office into an expanded Department of Administration.

“I don’t support it,” State Controller David McCoy said. “I don’t think it makes much sense.”

McCoy said he believes the proposed change will strip his department of its independence and potentially compromise the state’s accounting process.

“We’re not in the business of painting a pretty picture by the numbers,” he said. “Rather, we’re in the business of painting the actual story.”

The Office of State Auditor, in a statement, said that “any change that would affect that independence would have to be carefully considered.”

Stam said he’s already considered it and supports the governor.

“By flattening the lines of control, we can do away with a lot of useless waste,” he said.

The proposed changes require approval by the General Assembly, which doesn’t reconvene until next month.

It’s unclear how many jobs could be lost. Perdue said Thursday that she would release more details early next year.

Another cost-saving measure Perdue announced is privatizing some of the duties now handled by state workers, such as information technology – an area where the government spent $1.1 billion in fiscal year 2009.

Perdue said a private vendor handling the state’s IT operations could save millions, but some in the industry believe it will cost taxpayers more.

“I haven't seen anything in other states where it's saved them any money,” said Lynn McGarrah, a state IT support specialist for 20 years.

She pointed to published media reports about a collapsed outsourcing deal with Indiana and IBM in which that state sued the provider over mishandling of welfare claims.

Virginia outsourced its IT services to Northrop Grumman and has been plagued with rolling computer outages, and Texas has accused IBM of “chronic failures” on its outsourced services.

McGarrah said there is also a difference in accountability between the public and private sectors.

“We don’t serve a stockholder,” she said. “We serve the citizens of North Carolina.”


This story is closed for comments.

Oldest First
View all
  • dandonna1983 Dec 17, 2010


  • dandonna1983 Dec 17, 2010

    well it is about time she cuts jobs. we as north carolina citizens are tired of paying for dead weight, and the lady below me mustainemad is right but the ones i would arrest is the state workers who are sucking us dry and the politicians who keep giving therselves raises, it is time to slash 3/4s of state govt now!! and get govt out of the lives of the people of NC time to stand on your own two feet and get to work usless paracites!!!!

  • mustainemad Dec 13, 2010

    If you REALLY want to cut costs, ARREST AND PROSECUTE all the liars and cheaters that get welfare, food stamps, free school lunches, and medicare/medicaid benefits illegally. You truly cannot believe how easy it is to get many of your bills paid, just tell the right lie and stick to it. "My husband left me,and he was the only one working", get welfare & food stamps. Anyone paid to see if husband is still puttin' his shoes under the bed every night??? By federal law, only 3% of applications for free or reduced price meals in schools have to be verified--and even then, a parent can still get away with it if they stick to the same lie. Want to save money, stop FRAUD.

  • mjackson1515 Dec 13, 2010

    Have they looked at the nutrition department? It seems that there are huge wastes there. Tremendous amount of unnecessary travel with locations for meetings sometimes set in the interest of what would make a nice vacation location for personal tourist interest on the weekend prior to or after the actual meetings , (they can bring their families at their own expense however still doesn’t warrant having a meeting in a state that doesn’t geographically touch any of the states that the attendees are from) The time off (sick/PTO) they get is very generous, it seems that we could almost hire extra person to cover that vacation time given to every 3 to 5 paid full time employees. Since I am not one of the employees holding one of these $65k - $100k positions and my information is peripheral at best I am just saying that since I have heard the bragging from two people I think that Bev should have a look at this department. It seems that even if what I have heard (some of which I h

  • ratherbnwpb Dec 10, 2010

    I have said it before, we are wasting lots of $$$$$$$$$ by keeping an ABC.

    Let private ownership of liquor stores operate. They are a PLUS for the State. No State: salaries, benefits, operating costs, etc. The States just sits back and has the tax revenue come in. I am sure that there must be some graft with the state run ABC which liquor to purchase.

    The ABC Stores are state controlled by liquor sales only to the stores. The stores are not run by the State, they are operated by local ABC Boards. They are not State Employees either. Those people in the ABC Store are paid from the liquor sales revenues.Local law enforcement in the towns they are in get a share of the tax money for law enforcement.

  • amyrn Dec 10, 2010

    How about finding a cheaper insurance company to handle the state insurance. BCBS has a monopoly on it and it is outrageous. I also agree, there are several positions where people are making 200k, eliminate them and save the 200k bucks! Eliminate a couple of folks making 100K or more and save some there. But, you need to leave the front line workers alone. I know everyone talks about the DOT but I have seen plenty of DOT workers busy by the highways. That is one area that was contracted out a lot a long time ago and it has not saved any money.

  • CozyCake Dec 10, 2010

    This is all coming from a govenor that just paid 2 million for a company to duplicate a process the state already does. She has no idea what she is doing. Trimming yes but with some sense, but then that would go against the way she works.

  • Eduardo1 Dec 10, 2010

    I have said it before, we are wasting lots of $$$$$$$$$ by keeping an ABC.

    Let private ownership of liquor stores operate. They are a PLUS for the State.
    No State: salaries, benefits, operating costs, etc. The States just sits back and has the tax revenue come in.
    I am sure that there must be some graft with the state run ABC which liquor to purchase.

  • Qwerty27807 Dec 10, 2010

    At least someone has the courage to attempt to do the right thing. The only alternative to cutting spending is to raise taxes. Not a pleasant choice, but two decades (or more) of kicking the can down the road on public spending has lead us to this point.

  • jrbarnes Dec 10, 2010

    Seriously, saves 200K a year. She could probably find just one position to eliminate and save that. But let's lay off many State Employees so they will have to draw unemployment and pay someone in the private sector and don't forget, it will cost to combined these agencies. Leave the tax that was suppose to expire on the books, who really remembers this anyways. So if DOC Corr. Officers fall under Dept. of Crime Control will they get paid as law enforcement? There has to be a better way. Oh, don't forget the retirees' that have been rehired under the REUP program. They get 2 checks. Cut them out.