Local Politics

Perdue again taps trust funds for spending

Posted April 9, 2009 3:28 p.m. EDT
Updated April 9, 2009 11:47 p.m. EDT

— Gov. Beverly Perdue on Thursday ordered a state hiring freeze and identified $145 million in various trust funds that could be used to pay the state government's day-to-day bills.

“North Carolina continues to face budgeting challenges. My decision to limit agency spending is crucial to North Carolina’s ability to meet our financial obligations and to provide the essential services required by our citizens,” Perdue said in a statement.

In addition to freezing hiring, she ordered freezes on agencies buying goods and services and all travel not approved for public safety, public health and economic development reasons. Exceptions to the freezes might be allowed for classroom instruction expenses and emergency situations related to law enforcement, health care and public safety.

The 18 trust funds Perdue is tapping include the Health and Wellness Trust Fund, the Tobacco Trust Fund and several in the Department of Environment and Natural Resources.

A Department of Environment and Natural Resources spokesperson said Perdue’s order could mean state park construction, acquisitions and grants will have to delayed.

Budget officials project a  shortfall up to $2.2 billion when the fiscal year ends in June.

Perdue spokeswoman Chrissy Pearson said the governor already has secured more than $1 billion in reserves and dedicated funds since taking office to narrow the gap, including the $787 million in the state's rainy-day reserve fund and $50 million in a reserve with state lottery profits inside.

“Clearly, we are in crisis,” state Rep. Nelson Dollar, R-Wake County, said. “We need a much fuller understanding.”

In February, Perdue tapped the lottery reserve fund and three other funds to create a $300 million emergency account for operations.