RALEIGH, N.C.  – A House panel has rejected a bill that would have given a $6,000 annual tax credit to North Carolina parents who put their special-needs children in private school.

The House Education Committee voted 26-21 on Tuesday against approving the measure.

Supporters such as GOP Rep. Paul Stam of Wake County said the tax credit would help families when the public schools can’t meet the needs of a child with disabilities.

Education groups representing teachers, school administrators and boards opposed the idea, saying it’s better to keep investing in public education to help these children.

Stam said the credits would actually save government millions of dollars overall for the public schools in the cost of teaching children.

RALEIGH, N.C. – North Carolina Gov. Beverly Perdue ordered a half a percent pay cut Tuesday for all state employees and teachers and said they would get 10 hours of time off in exchange for the loss in pay.

Perdue also warned that the state’s budget shortfall for the current fiscal year may exceed $3 billion.

She said the temporary pay cut will save $65 million, although that’s relatively small compared to the shortfall now expected.

Perdue said in a statement she also has identified ways to close the remaining budget gap. She said that will include more special funds, tapping the state’s Savings Reserve Account and using federal recovery dollars.

The Democrat said the economic crisis has forced her “to make difficult decisions.”

Perdue made the cuts effective through June 30, the end of the fiscal year. Employees will be allowed to take the 10 hours off until the end of the 2009 calendar year.

Before Perdue revealed the larger shortfall projection, state leaders had expected the budget shortfall would be about $2.2 billion this fiscal year.

“North Carolina continues to experience the effects of a national economic crisis, which force me to make difficult decisions in order to maintain a balanced budget through June,” Perdue said in a statement.

“I will do what I must in order to ensure that North Carolina can pay our bills and provide the essential services required by our citizens.”

PROMISES, PROMISES: Saving teacher jobs tough
WASHINGTON  – President Barack Obama promises his economic stimulus law will save hundreds of thousands of teaching jobs, but some states could end up spending the money on playground equipment or wallpaper – and the president might not have the authority to stop them.

Obama says nearly all of the education money in the Recovery Act, which will start going out to states this week, is designed to retain teachers.

Education Secretary Arne Duncan threatens to “come down like a ton of bricks” on anyone who defies the administration’s plans to bring relief to states like California where 26,500 teachers have gotten pink slips. Across the country, 9 percent of teachers – about 294,000 – may face layoffs because of budget cuts, according to a University of Washington study.

But plans for the money are pulling in other directions, particularly in states with Republican governors:
- Hawaii Gov. Linda Lingle wants to fill a budget gap.
- Idaho Gov. Butch Otter wants to hold the money in reserve.
- South Carolina Gov. Mark Sanford wants to pay down debt; he’s been turned down by the White House budget office and is threatening to refuse some of the money, as is Alaska Gov. Sarah Palin.

There are loopholes in the stimulus law for both states and school districts.

Of the $100 billion for education in the stimulus bill, $40 billion comes as part of a fund to stabilize state and local budgets that has fewer strings attached. As the bill made its way through Congress, lawmakers decided not to prohibit states from using the stabilization money to replace precious state aid for schools. That means instead of getting extra help to weather tough times, school districts could wind up with the no additional state aid even as local tax revenues plummet.

State lawmakers and governors in Kansas, Rhode Island and Texas are among those seeking to use their federal stimulus dollars to replace state aid, rather than add to it.

In addition, the law was written so broadly that most of the stabilization dollars can be spent on just about anything – carpet, wallpaper, playground equipment, even new school construction – which may bother Senate moderates who insisted on dropping a new school construction program before they would vote for the bill.

That’s because school districts can spend the money as federal impact aid, a relatively small program for poorly funded districts. By contrast, most federal education dollars are supposed to be spent on teacher salaries or academics.

“Congress opened a Pandora’s Box to allow districts to use the funds for impact aid,” said Michael Brustein, a Washington attorney who represents several state education agencies. “How you enforce against that is anyone’s guess.”

Santa Ana, Calif., English teacher Isa de Quesada is waiting to hear whether the stimulus dollars will bring her and 10 other teachers back to their school this fall. If not, class sizes at her school and others could swell, hurting the emphasis on quality education.

“Right now, I have 40 in two of my classes; we could go to 50 to 55 next year,” she said in an interview.

Recently, de Quesada had the chance to ask Obama about it in person when the president visited for a town hall meeting: “How are we going to make sure that money comes to our districts?” she said.

Obama replied that “the lion’s share” of the money is to keep teachers on the job.

Duncan said he can come down hard on states that don’t comply because he is releasing the money in installments, and because he will award billions of dollars in competitive grants later this year.

“And if we see an instance or two, or whatever it might be, where folks are not operating in good faith,” he said, “we will both withhold that second set of money, and we will eliminate them from any possible competition to receive these billions of dollars in discretionary money.”

Duncan also said last week he is looking for ways to force money to states where governors have said they would refuse it.

The administration could also face intense political pressure from members of Congress if stimulus money for their states is withheld.

“The jury is really still out on how forceful the Obama administration is going to be on this,” said Amy Wilkins, a lobbyist for Education Trust, a children’s advocacy group.

“We’ve heard a lot of secretaries of education talk about rigorous enforcement and, `We are really going to hold them accountable,”‘ she said. “We rarely get that.”

The administration lobbied successfully to attach other strings to the money. In their applications, states must show improvement in teacher quality, data systems, academic standards and tests and supporting struggling schools.

Applications for the stabilization dollars will be available this week, and two-thirds of the money for education, $27 billion, will be released within two weeks of an application’s approval. K through 12 dollars are another reason why it may be tough to keep teachers from losing their jobs.

That money goes to states through a formula tied to state spending. The less a state spends on education, the less federal money it gets – and that works against states in the worst financial shape.

A glance of stimulus dollars for education

State    Stimulus dollars
Ala.     1,110.5
Alaska   189.1
Ariz.    1,442.0
Ark.     692.6
Calif.   8,564.4
Colo.    1,051.0
Conn.    765.7
Del.     209.0
D.C.     153.8
Fla.     3,936.9
Ga.      2,279.9
Hawaii   274.7
Idaho    346.8
Ill.     3,077.0
Ind.     1,475.1
Iowa     666.6
Kan.     648.3
Ky.      1,003.1
La.      1,113.4
Maine    296.4
Md.      1,250.3
Mass.    1,483.8
Mich.    2,458.8
Minn.    1,135.2
Miss.    757.7
Mo.      1,336.9
Mont.    231.2
Neb.     421.8
Nev.     550.1
N.H.     289.8
N.J.     1,923.9
N.M.     512.3
N.Y.     4,846.7
N.C.     2,057.7
N.D.     168.8
Ohio     2,683.2
Okla.    862.2
Ore.     818.2
Pa.      2,820.0
R.I.     255.2
S.C.     1,045.9
S.D.     205.2
Tenn.    1,415.7
Texas    6,052.6
Utah     654.6
Vt.      155.2
Va.      1,696.6
Wash.    1,400.9
W.Va.    419.3
Wis.     1,273.9
Wyo.     143.9

Source: Department of Education.

STATESVILLE, N.C. — During a quick campaign stop in Statesville on Wednesday, Lt. Gov Bev Perdue praised the city’s downtown as an example of a slice of Americana.

“It’s great to see Small Town, America, take hold,” Perdue said while surrounded by well-wishers at the Frame Gallery & Gifts store on West Broad Street. “Small towns are North Carolina. Even if you come from a big city like Charlotte, at some time in their lives, your have been part of a small town.”

Perdue, the Democratic nominee for governor, told the crowd she has come to really enjoy the campaigning.

“Bob (Eaves, Perdue’s husband,) said, ‘I don’t know if you’d rather serve or rather run for the office.’ Because I really love the politicking,” she said.

Perdue, who faces GOP nominee and Charlotte Mayor Pat McCrory in the Nov. 4 election, talked about how Statesville may have made its way onto her itinerary. She said Eaves (whom she married in 1997 and took his surname as her middle name) and retired Statesville judge Robert Collier are old friends.

She also shared the story of the how Eaves, who was a Republican when they met, gave her a sheet of paper indicating he had changed his political status to “unaffiliated” as his first Christmas present to her.

“He said, ‘Darling, I love you by even I can only go so far,’ ” she said.

Storytelling aside, much of Perdue’s 10-minute talk resembled a typical stump speech.

Neither of her parents graduated from high school, she said, adding that she was “old enough to have been told by people in Grundy, Va., that a girl doesn’t need an education.”

Perdue touted some accomplishments she played a role in, such as significantly hiking teachers’ pay and raising North Carolina’s educational rankings. She said she was part of an effort to curb smoking by teens.
“They all said, ‘Tobacco is the heartbeat of this state,’ ” Perdue said. “But we took it on. And today the youth smoking rates are the lowest in North Carolina history and are among the lowest in the nation.”

And then Perdue encouraged those gathered to not just vote for her but to help get her message out.

“You tell your friends you met a woman,” she said. “And tell them you listened to her. Tell them you drank a little of the Bev Kool-aid. Tell them you found someone who can make us inspired and bring the changes we need. And though there might be times we don’t agree on everything, I promise you will never be sorry you helped me.”

Perdue was later even more effusive in her praise of Statesville.

“I believe that, with help, every town in America can look just like Statesville,” she said. “I am saddened when
I go through a small town that has been boarded up because of businesses closing down or other reasons.

But it’s very encouraging to see a town like this that has reinvented itself and revitalized its downtown.”
Statesville attorney and Democratic party leader David Parker said he was impressed with Perdue.

“I think she’ll make an excellent governor,” he said.

He said Perdue’s plan of coming into mostly Republican territory was straight out of Terry Sanford’s playbook from his successful 1986 senate campaign.

“You got to take it to their base,” Parker said.

Mac Funderburk said Perdue did a good job of quickly explaining her positions.

“She came and told us what she’s all about,” he said. “And I think she’s got an excellent record.”

Gloria Hagar, the owner of Frame Gallery & Gifts, said she was pleased to serve as host.

“It was great,” she said. “It was democratic. And also I really like the camaraderie of a small town get-together. It was fun.”