@NCCapitol

GOP sets $18.3B spending target

Posted February 23, 2011 3:53 p.m. EST
Updated February 23, 2011 7:31 p.m. EST

State budget

— Republican legislative leaders on Wednesday set an $18.3 billion spending target for the fiscal year that starts in July, about $1.6 billion less than the budget proposed last week by Gov. Beverly Perdue.

They presented outlines to appropriations subcommittees in both the House and Senate that include possible funding cuts to the University of North Carolina system and pre-kindergarten programs and higher co-payments from people covered by human services programs.

“No decisions have been made. No specific positions or programs have been targeted,” Sen. President Pro Tempore Phil Berger said in a statement. “We were elected to reduce spending and right-size state government. This is the first step in that process.”

Lawmakers said they reviewed the current budget line by line over the past three months to arrive at the spending targets. They said their final budget will likely be larger because it will include other items not covered by the targets set for the appropriations subcommittees.

Republican legislators have vowed to balance the budget and rein in state spending without raising taxes. Perdue's proposal included rolling back only a portion of a penny increase to the state sales tax rate that is scheduled to expire in June, and it calls for lowering the threshold for North Carolina's estate tax.

Education spending would account for more than half of the GOP's target, at almost $10.5 billion. Among the items being considered are capping university enrollment, encouraging more students to enroll at community colleges for their freshman and sophomore years and cutting funding for "less essential" classes and degrees.

Lawmakers also plan to look at consolidating or eliminating the Smart Start and More at Four programs that help prepare youngsters for public school.

"As (the cut to education spending) gets bigger and bigger, it's going to make it harder and harder," said Leanne Winner, director of government relations for the North Carolina School Boards Association.

"I think, as we work through this process, we're going to have to find we need more revenue to protect the great things we have about our state," said Sen. Linda Garrou, D-Forsyth.

"She's on the side of the aisle that is spend, spend, spend and used one-time money of $3 billion to plug the hole. I would expect her to say that," said Rep. Harold Brubaker, R-Randolph, a senior budget writer for the House.

"There are no sacred cows. Everything is on the table," Brubaker said.

Funding for the Department of Health and Human Services would have a target of $4.3 billion, and lawmakers are looking at closing facilities, using managed care and provider assessments to control spending and raising co-payments for service.

"It's a scary time because you don't know where they want to cut or what they're aiming for and what services in particular," said Tracy Colvard, director of government relations for the Association of Home and Hospice Care. "It's a nervous time for everyone."

Closing facilities, reducing the cost of inmate health care and finding low-cost ways of handling people convicted of misdemeanors are among the items under consideration to limit public safety spending to $2.1 billion.

Lawmakers also might scale back environmental regulations to match federal standards, review economic development programs for possible reduced funding, privatize services and have some state employees work from home.

Although transportation funding comes from gasoline taxes and other fees and not from the state budget, lawmakers also noted that they might rework the formula for dividing money for road projects across North Carolina.

“The new majority in the General Assembly did not create this budget shortfall, but we were elected to fix it," House Speaker Thom Tillis said in a statement. "To do so, we have announced aggressive targets to reign in state spending, which has ballooned over the last decade. Everything is on the table as we look for creative solutions to this problem."