CHRIS SEWARD - cseward@newsobserver.com
Gov. Bev Perdue speaks to the N.C. House Dec. 14, 2010, at the Legislative Office Building in Raleigh.
Legislators will begin debating a proposal today that would give Gov. Bev Perdue more power to cut this year's budget by at least $400 million - even as their leaders are pressing her to do more.
They want Perdue to agree to cut $700 million before June 30, producing additional savings that would help close next year's projected $3.7 billion budget gap.
"We are hopeful we are going to get to more than $400 million," said Sen. Neal Hunt, a Raleigh Republican who is one of the chief budget writers. "She has not agreed to that yet."
Perdue spokeswoman Christine Mackey said the governor wanted to see whether agencies could get to $400 million in cuts, then see if more is necessary.
Perdue has already directed agencies under her control to cut their budgets by 1 percent then 2.5 percent, and non-Cabinet departments voluntarily complied. Last month, she asked legislators for authority to order all state agencies to save 5 percent over the next five months, which the proposal will allow.
Agencies can make the required reductions this year without laying off more state employees, Mackey said.
The next budget year, which begins July 1, may be a different story, when the state may face employee layoffs, pay cuts and required employee contributions to health care premiums, said Senate leader Phil Berger.
Additionally, the legislature may take more steps to cut the current fiscal budget, he said.
Agency heads anticipated the move to give Perdue more budget power. She and legislative leaders have been talking about it for weeks. Without the legislation, the governor has limited power to order savings on her own because the state is not in crisis and can still pay its bills.
State Agriculture Commissioner Steve Troxler said his agency voluntarily returned 2.5 percent the governor requested late last year but said he cannot come up with more saving without eliminating consumer services or agriculture programs.
"That pretty much cleaned us out," Troxler said.
The state Department of Public Instruction anticipates Perdue will ask the agency to return 5 percent of its $42 million budget, said June Atkinson, state superintendent of public instruction. The department is prepared to return $2.1 million, Atkinson said, having kept jobs unfilled, delayed purchases and limited travel. The department wouldn't be able to save more than that without laying off people, she said.
The state can get through this budget year and next without laying off more workers, said Dana Cope, head of the State Employee Association of North Carolina.
The group has collected ideas for savings from its members and discussed some with legislative leaders. A public announcement of its full report is planned for Feb. 15.
The state can easily exceed the $3.7 billion target by eliminating tax credits for preferred companies and making other common-sense changes, Cope said.
Cope wants state leaders to consider standardizing the rates the state pays to providers of medical services, whether they're treating Medicaid patients, state employees or prison inmates.
The state could find significant savings, perhaps as much as $1 billion, with the increased buying power that would come from consolidating health care, Cope said, and he has discussed the idea with Perdue's office and legislative leaders.
"It's a whole area North Carolina has not touched," he said.
