@NCCapitol

Perdue: State deficit cut by $1B

Posted February 9, 2011 4:38 p.m. EST
Updated February 10, 2011 7:54 a.m. EST

State budget

— Gov. Beverly Perdue took to the Internet Wednesday to deliver some big budget news.

In a YouTube video, Perdue announced that the budget shortfall for the fiscal year that starts in July will be about $1 billion smaller than previously projected.

As recently as last month, economists said the state would likely bring in $3.7 billion less next year than it would need to spend -- a budget gap of about 18 percent. Perdue said Wednesday that the projected shortfall has now been revised down to $2.7 billion.

"A billion dollars less is great news, but let me be very direct, we still have a very steep budget hole to overcome," Perdue said in the video. "There will be many tough, hard budget choices made in the next few weeks."

Perdue will deliver her annual State of the State address next Monday and is expected to unveil her budget proposal later in the week.

The governor said a combination of factors led to the improved budget picture. The state expects to bring in $700 million more than anticipated in sales, income and corporate taxes, which she attributed to job recruitment efforts.

Perdue spokesman Mark Johnson said another $250 million has come from cost savings in Medicaid and the State Health Plan. The last $50 million comes from what Johnson called a “hodgepodge” of savings in other areas.

Senate President Pro Tempore Phil Berger said in a statement that it's too soon for Perdue to be crowing about the budget.

“We are pleased the economy is showing signs of life, but we are alarmed Gov. Perdue is declaring ‘mission accomplished’ before the real work is done,” said Berger, R-Rockingham.

House Speaker Thom Tillis said he's "glad to hear that the revenues are up. We anticipated some of that. But we still have a very deep hole to fill.”

The new revenue numbers were sent to lawmakers just minutes before the House debated a proposal to cut economic development funds against the Governor's wishes.  But Tillis doesn't think the timing is suspect. 

"I'll take it at face value," Tillis said. "Things are moving quickly. But we still shouldn’t feel good about the fact that we still have a 2.7 billion dollar deficit. And that’s what we have continue to be disciplined and focus on." 

Perdue's press secretary Chris Mackey said the video was filmed in Perdue's office at the old Capitol.  Mackey said the announcement was made online because the Governor "wanted to share it across the state 'in person' as much as possible."