RALEIGH, N.C.  – North Carolina state government has at least $620 million at its disposal so far to close any budget hole this fiscal year.

State budget director Charlie Perusse (pur-ROOS’) and the General Assembly’s top economist gave legislative leaders Wednesday an update on the state’s financial picture through October.

Perusse’s office estimates it will have $469 million from unused funds and holdbacks of up to 5 percent from state agencies ordered by Gov. Beverly Perdue to ensure there’s money to pay bills.

There’s another $150 million in the rainy-day reserve fund.

So far, revenues are $95 million less than what lawmakers projected when they passed the $19 billion budget in August. That shortfall is nowhere near the $3.2 billion shortfall Perdue faced last year.

SACRAMENTO, Calif. – California’s ongoing fiscal crisis has attracted national attention, but a study warns that nine other states are barreling toward similar economic disaster.

A report released Wednesday by the Pew Center on the States says Arizona, Florida, Illinois, Michigan, Nevada, New Jersey, Oregon, Rhode Island and Wisconsin also are at risk of fiscal calamity.

That could mean higher taxes, more layoffs of government employees, increasingly crowded classrooms and fewer services in states that account for more than one-third of America’s population and economic output.

Most of the states face rising unemployment and high home foreclosure rates, and their revenues have dropped by double-digit percentages.

The analysis urges lawmakers and governors to take quick action to prevent economic catastrophe.

DURHAM, N.C. – On Nov. 12, State Representatives Paul Luebke and Mickey Michaux and State Senator Robert Atwater will visit Durham Technical Community College for a panel discussion about how the state budget is developed and the challenges faced in the 2009 legislative session.

The legislators will discuss the difficulties of plunging revenues during the recession and the compromises that were made to develop a balanced budget. The legislators will also speak about the role of advocacy groups in the process.

The event is sponsored by Durham Tech and the League of Women Voters of the Orange-Durham-Chatham Unit. The event will take place in the Multi-Purpose Room of the Phail Wynn, Jr. Student Services Center from 3 to 4:30 p.m. A reception after the discussion will offer those attending an opportunity to meet the legislators.

WASHINGTON  – The House has approved a stopgap spending measure to avoid a shutdown for 11 Cabinet-level departments whose budgets won’t be enacted by a midnight Saturday deadline.

The measure would give Congress until Dec. 18 to finish seven incomplete spending measures that were supposed to be wrapped up by Sept. 30. The bill passed by a 247-178 vote and now goes to the Senate, which must pass it this week to avoid a partial shutdown.

The legislation, among other things, extends highway programs and federal loan guarantees for larger mortgages. The anti-shutdown measure was attached to a remarkably generous spending bill for the Interior Department and environmental programs. Lawmakers are pumping billion of dollars into clean and safe-drinking water projects.

RALEIGH, N.C. – North Carolina courts weighed in again Tuesday on how far a governor can go to balance the state’s budget, this time ruling then-Gov. Mike Easley was wrong to transfer $80 million from a road-building fund to pay for other government operations.

In a split decision, a three-judge panel of the state Court of Appeals ruled the state constitution doesn’t allow a governor to transfer money appropriated by the General Assembly for one purpose and use it for another purpose without legislative approval.

Easley transferred the money from the Highway Trust to the state’s general fund with a February 2002 executive order to help close a shortfall in that year’s budget that ultimately reached $1.6 billion. Two former state officials sued later that year, arguing trust fund revenues must only be used for purposes outlined in state law.

Judge Robert Hunter of Morehead City, writing the majority opinion, said a governor has many avenues to narrow a budget gap – including escrowing funds, employee furloughs and temporary spending cuts. But transferring funds appropriated by the Legislature crosses the line, Hunter wrote in reversing a ruling by Superior Court Judge Joseph John in March 2008.

“The transfer of these funds, designated by the budget statute for one purpose and transferred by the Governor to another does not fulfill the executive’s duty to administer the budget enacted by the Legislature, nor does it assure that the laws are faithfully executed,” Hunter wrote. Judge Barbara Jackson joined with Hunter in the 2-1 opinion.

Easley and current Gov. Beverly Perdue – who also has withheld money and cut down on expenses to deal with even worse fiscal troubles – have said the constitution gives the state’s chief executive broad powers to scour state government to find money to close a shortfall.

The state constitution says the governor “shall effect the necessary economies in state expenditures” to “insure that the State does not incur a deficit for any fiscal period.”

In the dissenting opinion, Judge Linda McGee said Hunter’s interpretation of the state constitution would hamstring governors from acting quickly to plug a deficit.

“The restrictions on executive action as mandated by the majority are inefficient, impractical, and likely to thwart the governor in the governor’s constitutional duty to prevent a deficit,” McGee wrote.

The divided court means the state Supreme Court must hear the case if the state appeals the ruling. The office of Attorney General Roy Cooper is reviewing the ruling and will consult with Perdue’s office before deciding its next move, spokeswoman Noelle Talley said.

The three judges agreed to uphold a portion of John’s ruling that the Legislature had the authority to take another $125 million from the Highway Trust Fund to balance the 2002-03 budget.

The Highway Trust Fund is primarily used to build urban loops, widen four-lane highways and improve secondary roads. The fund generates revenue largely through a 3 percent use tax on vehicle sales, a gasoline tax and title fees.

The case already has wound its way through the court system once on a procedural question. The state Supreme Court agreed in 2006 that Transportation Secretary Jim Harrington and ex-Sen. Bill
Goldston, who helped created the fund in 1989, had the legal standing to sue as taxpayers.

An attorney for Goldston and Harrington said he would comment on the case later Tuesday.

State courts have heard two similar cases involving how Easley managed the budget crisis earlier this decade – decisions that will affect the options Perdue and future governors have to plug spending holes.

In 2005, the state Court of Appeals unanimously upheld Easley’s decision to withhold $210 million in expected tax reimbursements to local governments to balance the budget.

But another three-judge panel last year ruled it was wrong for Easley to intercept $225 million headed to state employee pension funds because the state and federal constitutions protect them.

RALEIGH, N.C. – Gov. Beverly Perdue hasn’t had to use up all of North Carolina’s “rainy-day” funds to manage the state’s fiscal storm.

Perdue’s office said Tuesday there’s still $150 million left over from the $787 million Perdue took from the savings reserve account in March. The extra money means the state has some cash to respond to a hurricane or other disaster.

Perdue took the money to ensure the state could pay its bills because of dwindling tax collections. There was no guarantee any money would be left over.

The State Controller’s Office released a report late last week finalizing numbers for the fiscal year ending June 30. It says tax revenues dropped 10.9 percent, or more than $2 billion, compared to the previous year.

RALEIGH, N.C.) – Gov. Beverly Perdue is easing up on spending restrictions following approval of a state budget, but limits on purchases, travel and hiring for North Carolina’s government will continue.

Perdue’s budget director on Friday sent a memo telling state agencies to hold back five percent of what the budget authorized.

Public schools are exempted. Agency heads must continue approving travel and pay raises, but now have flexibility to decide how to manage spending.

Since April, state agencies have been authorized to spend only for mandatory obligations such as salaries, debt service and utilities.

Perdue spokesman David Kochman said the governor is being cautious since tax increases used to balance the budget won’t be available for months.

RALEIGH, N.C. – The State Board of Education Wednesday approved emergency rules implementing Gov. Bev Perdue’s directive to give public school systems greater flexibility to preserve teacher jobs and protect classrooms using federal recovery and state funds.

“I understand superintendents across North Carolina are facing tough budget decisions,” Perdue said. “My goal is to give them as many tools as possible to keep teachers in our classrooms, including the flexibility they need to maximize use of federal recovery funds.”

The policy allows public school systems more flexibility to shift state funds to make best use of resources from state, local and federal sources — including recovery money — for classroom instruction and activities.

It also institutes monthly reporting on types of jobs created and saved by public school systems using federal recovery funds.

Over the next two years, public school systems will directly receive $579 million in federal recovery funds and may be eligible for additional money from competitive grants.

RALEIGH, NC – In spite of House Speaker Joe Hackney’s (D-Orange) bold statement that “there is no pork in this budget,” the Civitas Institute has identified nearly $300 million in questionable appropriations for the fiscal year 2009-10 state budget.

In the midst of a recession and one of the largest budget deficits in state history, lawmakers adopted $1.1 billion in new taxes in order to help balance the budget. Indeed, Hackney declared that, in part, the new taxes “saved public education and its core mission in North Carolina.”

But what else are state leaders “saving”? While higher taxes will inevitably lead to lost jobs, a closer look at the final state budget reveals that the state continues to waste millions of taxpayer dollars for animals, plants, public television, walking trails, tourist attractions and corporate welfare.

A review of budget spending that was not cut during this year’s “budget crisis” should call into question the priorities of Raleigh politicians. Included in the recently-approved spending package is:

·         $1.1 million for the executive aircraft division

·         $10 million to subsidize in-state tuition for out-of-state scholarship athletes

·         $2.9 million for the North Carolina symphony

·         $11.1 million for “tourism, film and sport development”

·         $9.4 million for marine fisheries research

·         $4.7 million for a “special zoo fund,” a “grassroots initiative” sponsored by the Department of Environment and Natural Resources, and the “adopt-a-trail” program

·         $8.6 million for the NC Arts Council

·         $1.1 million for the botanical garden at UNC-Chapel Hill

·         $252,000 for the “cemetery commission”

·         $563,000 for the Ergonomics Center at N.C. State

Asks Civitas Institute policy analyst Brian Balfour, “Is it really necessary to destroy private sector jobs via tax hikes in order to finance more than $40 million on museums, art councils and symphonies? In this ‘deepest recession since the great depression,’ is it appropriate for the state to spend $14 million on state-run television and more than a million dollars for state government planes?”

The Civitas Institute’s full list of questionable spending priorities can be found here.

“A little investigation makes it readily apparent that Raleigh lawmakers are more concerned about a budget that protects frivolous ‘wants’ and new, unproven programs than protecting the jobs of its citizens,” concludes Balfour.