RALEIGH — Democratic Gov. Bev Perdue greeted the first Republican legislature in more than a century Tuesday, agreeing to deeper budget cuts, proposing to eliminate inefficient boards and commissions, and carefully tucking away her veto pen.
But as Perdue extended the olive branch to the GOP legislature, she also laid the groundwork for a potential clash.
In preparing her budget recommendations to the legislature, Perdue said she was considering including $1.3 billion in temporary tax increases passed by the legislature in 2009 - but due to expire in June - as an alternative to large-scale cuts in education.
"At the end of the day, I am not going to be the one who shuts down public education in North Carolina," Perdue said at a news conference. "I am not going to be the one who puts 50 kids in a classroom. It's wrong for children."
If the governor does include the temporary tax increase - and aides said the governor has not yet made a decision - it would likely set up a confrontation with the Republican-controlled legislature whose leaders have voiced a strong preference for letting the 1 cent sales tax and the corporate and personal income tax surcharges expire.
Perdue said she hopes to give her State of the State address to the legislature in mid-February and to deliver her budget recommendations later that month.
Agreement on cuts
The governor on Tuesday was emphasizing cooperation, not confrontation, with the new Republican majority.
She said she had an agreement with the Republican legislative leadership to broaden the cuts in the current fiscal year, to allow her to begin making cuts at a rate of 5 percent from all state agencies, including those agencies not under her direct control such as the university and community college systems. Perdue said she expects the new legislature, which convenes today, to grant her emergency powers to make the broader cuts.
This is an effort to prepare for the projected $3.7 billion budget shortfall for the new fiscal year that begins July 1. Republican lawmakers have been pressing her to make sharper reductions during the remaining months of the current fiscal year to put the state in a better position to deal with the fiscal crisis.
Shortly before Christmas, state budget director Charles Perusse sent out a memo urging all state agencies to cut 2.5 percent. That was on top of the 1 percent cut Perdue ordered in August. If the legislature grants her authority to make a 5 percent cut for the last five months of the fiscal year, she could reduce spending overall by 2.5 percent for the year ending June 30.
"We have cut 3 percent already," Perdue said. "We can do that under the authority that the law gives me. I have asked the legislative leadership to give me the statutory authority to go ahead and make it a 5 percent across the board cut.
"I have already told the agencies to begin preparing for that, so it is not going to come as a shock," Perdue said.
She estimated that the cuts would save between $500 million and $600 million, better positioning the state for next year's shortfall.
Look at the boards
The governor also encouraged the legislature to review 345 boards and commissions and either consolidate, eliminate or reauthorize them by the end of the year.
"I feel sure there will be consolidation of many of the boards," Perdue said. "If I had the authority, I would have done that. There will be the elimination of some. If I had the authority, I would have done that."
This is part of what she calls the "reset" of state government to re-examine what still works and what should be discarded in the face of the more austere budget realities. While Perdue did not recommend which boards or commissions should be eliminated, she singled out the North Carolina Rural Electrification Authority, created in 1935 to help get power lines into the country, as an example, of a board no longer needed.
Striking a conciliatory tone, Perdue refused to speculate on whether she might veto a Republican-backed bill that would require voters to provide identification at the polls, despite previously strongly criticizing such a measure.
"I do think it would be disingenuous of anyone before the new session even starts to say there are a few thing that I will absolutely will veto, 'How dare you send them over,'" Perdue said.
"There will be great opportunity for give and take," she said.
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