Perdue wants next NC budget nearly $1B higher

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RALEIGH, N.C. — Democratic Gov. Beverly Perdue’s final budget proposal released Thursday hinges on restoring public education cuts with a state sales tax increase that Republicans in charge of the North Carolina Legislature have said repeatedly won’t happen.

Leaving office this January after deciding not to seek re-election, Perdue wants to spend nearly $1 billion more in the year starting July 1 compared to what’s now scheduled in the two-year spending plan approved by the Legislature over her historic veto in 2011.

She uses a three-quarter cent sales tax increase to generate an extra $760 million, a big chunk of which would eliminate mandated cuts for local school districts that are projected to reach $503 million under the budget law currently in place.

The end of the local “flexibility cuts” and further improvements in teacher-student ratios in early grades could save or restore 11,000 public school positions, Perdue said — an attractive number to parents and voters in areas that have felt the bite of spending cuts. Overall, public school personnel levels fell by 4,800, compared to the year before. Spending for the University of North Carolina and community college systems also would increase.

North Carolina state employees and public school teachers also would get their first pay increase since 2008 under her $20.9 billion plan to adjust the budget’s second year.

“My proposed budget shows to the people of this state that there are good options for us as a state, for our people and for our future,” Perdue told reporters. “We have an opportunity right now to invest in a better future.”

Legislative leaders quickly panned the plan because of the additional taxes. The GOP won a majority in the House and Senate in 2010 on a platform of letting expire last year a similar temporary penny sales tax approved by Perdue and General Assembly in 2009 in the depths of the economic recession. Perdue’s proposal would cause the base sales tax most consumers pay to rise from 6.75 percent to 7.5 percent through as long as mid-2014.

House Speaker Thom Tillis, R-Mecklenburg, called the plan “more of the same failed approach that led to the fiscal mess the Republican legislative majority inherited.”

Added Senate leader Phil Berger, R-Rockingham: “The cycle of irresponsible taxing, borrowing, and spending must stop.”

Without identifying them by name, Perdue continued her criticism of Berger, Tillis and their lieutenants, saying it was short-sighted of the Legislature to approve a budget last year without the higher sales tax in place. She said “it will be truly be a failure of imagination and ambition” if Republicans choose to ignore her proposal.

“I’m hopeful that they will not consider this budget dead on arrival,” she said. “Let them find another revenue source. I’m not beholden just to the sales tax, but we have to have revenue to do what we need to do.”

Rep. Harold Brubaker, R-Randolph, senior co-chairman of the House Appropriations Committee, said he wants to read Perdue’s budget and consider whether any cost-cutting methods she recommends is worth adding to his chamber’s proposal. The Legislature reconvenes next week to begin debating adjustments to the budget’s second year.

Brubaker said the Legislature’s final product will be closer to the $19.9 billion budget already approved last year, rather than the $20.9 billion plan Perdue is offering.

“Frankly, I was disappointed in the governor,” Brubaker said. “I thought that she would want to go out on a high note working with the (General) Assembly rather than be in controversy.”

The budget also would give a tax credit of up to $5,000 for small businesses that hire the long-term unemployed or recent veterans and would provide higher education tuition assistance to veterans and their families.

The budget proposal lacked sweeping new programs or initiatives, but the governor said it focused on items she’s talked about for years — investments in education and job creation as well as promoting the state’s military-friendly climate.

“The budget, from my perspective, is very ambitious,” she said.

Democrats now in the minority at the Legislature praised Perdue’s plan for focusing on the righ priorities. The ability of Democratic leaders to keep party colleagues in step in opposition to Republican plans will determine whether the governor can succeed in budget negotiations. A year ago, five House Democrats joined Republicans in canceling Perdue’s budget veto.

Liberal-leaning groups said Perdue’s inclusion of more revenue was a good step toward improving education and the state’s work force. Alexandra Sirota with the North Carolina Budget & Tax Center said lawmakers could look to changes in the personal and corporate income tax and ending special tax breaks to tap into alternative sources of money.

Perdue also received praise from early childhood education advocates for spending $43.2 million to restore 20 percent cuts the budget law made to the Smart Start initiative and the North Carolina pre-kindergarten program. North Carolina Pre-K, which has been the subject of a legal fight, would receive nearly 4,600 slots for families of at-risk 4-year-olds.

“We applaud Gov. Perdue for putting forth a budget that heavily invests in young children,” said Dr. Olson Huff, chairman of the state umbrella group for Smart Start.

Perdue’s budget proposal would provide experience-based raises for public school professionals that on average raises salaries by 1.8 percent for teachers and 1.5 percent for administrators. State and university employees also would get 1.8 percent raises.

Dana Cope, executive director of the State Employees Association of North Carolina, said legislative leaders seem interested in raising worker pay, too, after static worker salaries have been eroded by inflation.

“After four years of wondering around the desert, we get a sip of water,” Cope said.
This article was provided by The Associated Press Wire.  (Copyright 2012 by The Associated Press. All Rights Reserved.)

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