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Easley Addresses State Budget Crisis, Invokes Emergency Budget Powers

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RALEIGH, N.C. — Gov. Mike Easley said the state needs cash, and for the second time, he is using emergency powers to try and fix the mounting budget crisis.

This is the second year in a row that Easley has had to deal with a budget crisis. Holiday sales did not help and so far, the two months of the new year have not produced evidence of economic recovery.

Easley said the state figured revenue collections would grow 4 percent. Yet only 3 percent in taxes have been collected, showing zero growth.

"It's the first time since we've been keeping the statistics that the state has had negative growth and that's been 30 years," he said.

Easley signed an emergency order that allows him to seize over $1 billion in funds in case revenue collections do not improve by June 30.

Among the money Easley is counting on:

  • $356 million in state agency cuts
  • $313 million from the state's Rainy Day Fund
  • $112 million from building repair and renovation
  • $95 million witheld in payments to cities and counties
  • $80 million in highway money
  • Easley pitched the issue of a statewide lottery again, indicating the money the state would make would help plug the big budget hole.

    "Now we're putting ourselves in a competitve disadvantage with all of the surrounding states when they have an infusion of education revenue from education lotteries and we don't have one," Easley said.

    Easley said he will not ask educators to cut any school, community college or university money that goes directly to the classroom. Easley is leaving those decisions about state agency cuts up to agency heads, but he does not expect any layoffs.

    Related Stories:

  • Easley Signs Budget Into Law
  • State Budget Clears Final Hurdle
  • House, Senate Agree On Budget


    Fred Taylor, Reporter
    Terry Cantrell, Photographer
    Kamal Wallace, Web Editor

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