State Budget Crunch

Perdue says slash more

Agency heads told to cut 9 percent

Rob Christensen - Staff Writer

Published: Thu, Feb. 26, 2009 12:30AM

Modified Thu, Feb. 26, 2009 05:34AM

Gov. Beverly Perdue on Wednesday ordered deeper cuts in state government, a move that could potentially jeopardize such North Carolina icons as "The Lost Colony" outdoor drama in Manteo and the High Point Furniture Market.

Taking steps to manage North Carolina's growing budget crisis, Perdue asked state agencies to reduce their budgets this year by as much as 9 percent. Last month, Perdue had asked for 7 percent cuts.

To help keep the state out of the red, Perdue also said she would dip into various special funds for $300 million that had been reserved for school construction, textbooks purchases and water and sewer projects.

"The state constitution requires that I balance the state budget," Perdue, a Democrat, said in a statement, "and I will do that while protecting public education as much as possible."

The move was described as necessary by other state leaders.

"It's going to get worse," said Senate leader Marc Basnight, a Manteo Democrat. "She is moving to 9 percent. She will have to go higher. We are in a major, major economic crisis. It's affecting the vast majority of North Carolinians. The government needs to respond and do so quickly."

In asking for deeper cuts, Perdue did not specify which programs are on the chopping block.

But her office released a list of some of the programs that her budget office is considering for cuts.

Those include seven smaller and older state prisons, eliminating inmate road crews, cutting out the Capitol Police investigative unit, ending state funding for "The Lost Colony" and the Shakespeare Festival, ending state funding for the High Point Furniture Market, eliminating the Labor Department's apprenticeship program and ending state meat and poultry inspection programs.

The Lost Colony is one of the cultural jewels in the district represented by Basnight. But he said it was fair to consider "The Lost Colony" along with other state programs.

"It definitely says the situation is getting worse," said Elaine Mejia, a budget analyst with the N.C. Budget and Tax Center. "A 9 percent cut is really significant. You're approaching the point where you will see real reductions in services and layoffs of employees."

As a precautionary step, Perdue said she would transfer up to $300 million from several special accounts into the state's General Fund. Those are $100 million from the Clean Water Management Trust Fund, $100 million from the Public School Building Capital Fund, $50 million from the Public School Text Book Fund and $50 million from the lottery reserve fund.

June Atkinson, the state superintendent of public instruction, said she agreed with the steps.

"I think the action she took today illustrates what a dire place we are in," Atkinson said. "It is more important to pay the salaries of teachers and others. With textbooks and constructions, those purchases can be deferred to another time."