RALEIGH — House Democrats are expected to unveil a budget proposal next week that would slash state spending and reverberate in schools, institutions and communities across North Carolina.
The House proposal, which is not finished and could still change, would balance a $4.2 billion shortfall almost entirely through spending cuts.
Education spending would be cut 12 percent from this year, meaning that thousands of teachers would either be laid off or not hired before school begins next year. Funding for university centers, programs and initiatives across the state would be slashed.
Thousands of state jobs would be eliminated, including 1,000 positions out of 21,000 at the state agency that runs prisons. Dozens of nonprofit agencies would lose state funding. Poor children would have less access to health care.
Every category of state government would be cut, said Rep. Mickey Michaux, a Durham Democrat and the senior budget writer in the House.
But House leaders are not proposing -- not yet, at least -- to raise taxes. They would use some federal economic stimulus money, and possibly some fee hikes, to fill the gaps not covered by spending cuts.
"You're looking at a bad situation. People are going to be hurt," Michaux said. "It's got cuts in it like nobody has ever seen before."
The current state budget is $21.4 billion. The House budget for the next fiscal year, which begins July 1, would be about $17.5 billion under the current proposals. The state last had a budget of that size in fiscal year 2006.
Drafts of several pieces of the budget proposal were made available Wednesday through a public records request. The proposals have been previously discussed in various committee meetings and might be modified by House leaders before they are rolled into a single budget proposal next week.
The draft House budget would contrast sharply with earlier proposals advanced by Democratic Gov. Beverly Perdue and the Senate, which is also controlled by Democrats. Those budget proposals were presented before revenue collections, already weak, dropped sharply in the spring. The previous proposals included spending cuts, but nothing as deep as those being considered by the House.
The House budget is likely to get a cool reception in the Senate, which has proposed enacting new or restructured taxes to make up roughly $600 million of the shortfall.
"We hate to totally lose ground in education, and we have very vulnerable people who can't wait for the economic recovery," said Sen. Linda Garrou, a Winston-Salem Democrat and a Senate budget writer.
Unlike the federal government, North Carolina can't borrow its way out of the budget jam, because the state constitution requires North Carolina to have a balanced budget.
But Michaux said tax increases wouldn't bring in enough revenue to avoid painful cuts. He said raising taxes is a bad idea when the economy is already suffering.
Republicans have been pushing Democrats to cut spending instead of raising taxes. On Wednesday, House and Senate Republicans said they were skeptical that the Democrats who control the legislature will approve a budget free of tax increases.
Rep. Ric Killian, a Charlotte Republican, said Republicans have been shut out of the budget-writing process.
"I still believe what's going to happen is the budget will be changed at the last minute to include tax increases," Killian said.
Senate Republican Leader Phil Berger of Eden said the proposed cuts may be something of a scare tactic.
"The rhetoric has the effect of building up, within certain interest groups, demands for a tax increase," Berger said.
Interest groups and agencies have been preparing for the big cuts and the fight to come.
"It would devastate public education as we know it right now," said Rodney Ellis, vice president of the N.C. Association of Educators.
Some of the biggest savings in public education would come from eliminating teaching assistants in third-grade classrooms, saving about $130 million. The House would keep the Senate proposal to increase class size by two students, which would save $332.7 million.
The proposals would eliminate a program that provided free online college courses for high school students and a salary supplement for math and science teachers in certain counties. It would eliminate funding for literacy coaches.
Rep. Tricia Cotham, a Charlotte Democrat, said she will host a conference call on Friday to brief constituents, elected leaders, nonprofit leaders and others about the cuts in the House budget. Cotham said she wanted to get her constituents ready for the cuts ahead.
"You're going to see devastation, shock, anger, confusion," Cotham said. "Before we pull the rug out from under them, they need to know."
The budget proposal eliminates state funding to scores of nonprofit organizations, including the ALS Association and Communities in Schools. Special Olympics North Carolina, for example, has received $200,000 annually from the state. The House budget would eliminate that appropriation.
"What makes it more hurtful or significant to us is all the other revenue streams are down," said Keith Fishburne, president of the Morrisville-based organization. "Facing the prospect of losing the full $200,000 is something that's going to be difficult for us in terms of being able to offer the same quality of events that we have in the past."
Michaux said the state simply has no money and, therefore, no choice.
"There are going to be a whole lot of people who are going to be angry with us, but these are the times," he said.
Staff writer Mark Johnson contributed to this story.
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