State News

New governor faces economic woes from Day 1

Posted January 12, 2009 5:26 p.m. EST
Updated March 9, 2009 5:12 p.m. EDT

— Between her victory speech in November and her inauguration last Saturday, the job of governor got tougher for Bev Perdue.

From her first day on the job, Perdue will face challenges to come through on her campaign promises. The nationwide economic downturn means the new governor walks into a big budget mess.



North Carolina lost a greater percentage of jobs in October and November than any state in the country.

The State Health Plan needs a $300 million bailout.

Every monthly budget statement shows state revenue sinking along with the economy.

"It's as bad in my mind as it's been anytime since the Great Depression," Perdue said Monday.

The state will need to weather the storm with a combination of spending cuts and raising revenue.

"It won't be pretty," she admitted. "Nobody will be happy."

Each state department is being asked to provide budget proposals with suggested cuts for 3, 5 and 7 percent.

The new governor will head to Washington, D.C, Wednesday to lobby for federal stimulus money to get approved projects off the ground.

Administration Secretary Britt Cobb said Monday that programs and people are on the line. "I would say in all probability that there will some positions that will be eliminated."

Elaine Mejia, of the North Carolina Budget and Tax Center, thinks the new governor will be forced to consider new taxes.

"Unless lawmakers are willing to cut the heart out of state government, they'll need to produce more revenue," she said.

"The budget shortfall this year and (in) another couple of years is going to be so large, it's going to require having these kinds of discussions that you don't have to have when times are good," she said.

Plenty of lawmakers disagree, saying now is the worst time to consider new taxes.

Perdue did not offer specifics Monday.

"It just really hurts me to think about any of those discussions," Perdue said. "I'm not naïve enough to say 'never' to anything. I don't know, but I have a requirement to balance the budget."

Before her inauguration, the governor acknowledged that some of her plans would have to be put on hold, but said she remains committed to offering free access to community college.