Local Politics

Lottery, DOI say their budgets shouldn't be cut

Posted March 16, 2009 6:13 p.m. EDT
Updated March 17, 2009 8:31 a.m. EDT

State budget

— Gov. Beverly Perdue has warned that her proposed budget will include deep cuts for most programs that aren't related to education or to creating and keeping jobs in the state.

Officials with the North Carolina Education Lottery and the state Department of Insurance said they also should avoid the budget-cutting ax because they aren't funded with state tax revenue.

"Because we're funded differently, we should be treated somewhat differently," DOI spokeswoman Kristin Milam said, noting that insurance premiums paid by North Carolina drivers and homeowners pay for the department's operations.

"The General Assembly created us this way on purpose. They wanted to make sure that we were bringing in our own money," Milam said.

The state budget is in a $2.2 billion hole this fiscal year, and fiscal analysts say the deficit will grow by another $3.4 billion in the 2009-10 fiscal year, which starts in July.

Perdue has ordered state agencies to reduce spending by 9 percent, and her budget director said last week that some agencies could see cuts of up to 15 percent in the next budget.

"In these tough economic times , now is the time for all state agencies to find efficiencies,” Perdue spokeswoman Chrissy Pearson said.

Milam said the DOI has cut travel for its investigators, but she acknowledged Insurance Commissioner Wayne Goodwin and seven other department employees were attending a national conference in San Diego. She argued the conference is important to state business and that the number of North Carolina attendees had been reduced.

Deep cuts to the department's $40 million budget would compromise consumer protection through fewer insurance audits and building and fire inspections, Milam said.

The department also collects hundreds of millions of dollars in fees and license charges for the state each year, she said, meaning cuts could cost the state instead of saving money.

"We don't take taxpayer money, but we also generate a lot of income for the state," she said. "The state would not benefit. In fact, they'd probably lose money if they treated the DOI the same as other agencies."

Lottery director Tom Shaheen said cuts to the state-run numbers games also could end up costing the state revenue.

"The only place you have to cut is prize payouts, which then you would end up cutting your return," Shaheen said. "Our role as a revenue-raising agency would be totally be diminished."

The lottery expects its transfers to North Carolina educational programs between last July and June 30 will total $385 million, he said.

Like the DOI and other state agencies, Shaheen said the lottery has already trimmed travel and training.

"We'll do whatever we're told to do," he said.