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Revenue Drop Prompts Easley To Restrict Government Spending

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RALEIGH — State revenues fell 3 percent in the first quarter of the fiscal year compared to a year ago. The drop has prompted Gov. Mike Easley to call for additional plans to trim state government.

"The economic slowdown has worsened significantly since Sept. 11," said Easley. "The state must continue to keep its belt tight during these tough economic times. We have already cut $800 million and we will continue to seek out additional ways to reduce waste without hurting education or vital services for our state's most vulnerable citizens."

Easley said that to combat the expected shortfall, travel and purchasing restrictions and a hiring freeze in place since February will remain in effect.

He is also asking for input from other agencies on methods that can be put into place.

The budget approved by the Legislature and signed by Easley last month projected an overall revenue growth rate of four percent for the year, totaling $14 billion.

The budget includes a $620 million tax increase, with a half-cent sales tax increase set to begin next week. There is also a temporary two-year income tax increase on the wealthiest individuals.

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