Local Politics

Prospects dim for balanced state budget by June 30

Posted June 1, 2010 5:37 p.m. EDT
Updated June 1, 2010 6:53 p.m. EDT

— The likely loss of about $500 million in federal stimulus funds lawmakers had counted on to balance the 2010-11 state budget means agreeing on a spending plan will be more difficult, they said Tuesday.

The U.S. House passed a jobs bill last week that deleted $24 billion in support for cash-strapped states. North Carolina lawmakers had planned to use the money to plug holes in the Department of Health and Human Services after taking money from programs there to spend elsewhere.

"It could be really devastating. No question about that," said Rep. Mickey Michaux, D-Durham, a senior budget writer in the state House.

U.S. Sen. Richard Burr dismissed any notion that the Senate would add the funding for the states back into the bill.

"I don't suspect there will be any money for states," Burr said, adding that he and his colleagues are focused on balancing the needs of the country against reining in the soaring national deficit.

House leaders said they are moving forward with their budget recommendations and plan to include a back-up plan should the federal stimulus money not materialize.

"We need to move ahead with what we have, put our contingency measures in place before we leave and then see what happens," Michaux said. "We can last for a while, at least until September or October."

Sen. Linda Garrou, D-Forsyth, said the House's back-up plan just adds to questions she and other budget writers in the Senate have with the House's proposed budget.

"We've got lots of concerns about what we're hearing about the House budget," Garrou said, citing proposed cuts to the University of North Carolina system and a possible cap on university enrollment.

"We may have to scrap the whole budget and start over. That's what I'd rather do and do it well," she said.

Senate leaders said they won't pass a budget that includes the stimulus funds if Congress doesn't approve the money by the end of the month.

Gov. Beverly Perdue is working with the General Assembly to formulate the best course of action, a spokeswoman said.