Gov. Bev Perdue to seek more school funding, sale tax hike in budget

lbonner@newsobserver.comMay 10, 2012 

DEMOCRATS03-NE-022812-RTW

Governor Bev Perdue listens to questions during a press conference prior to the Sandford-Hunt-Frey dinner at the Marriott in Greensboro, N.C. on Saturday January 28, 2012. It was her first public appearance since announcing that she would not seek a second term.

ROBERT WILLETT — rwillett@newsobserver.com

Gov. Bev Perdue will ask legislators to spend an additional $562 million on K-12 schools and increase the state sales tax in the $20.9 billion budget she plans to release Thursday.

But Republican lawmakers on Wednesday made it clear they weren’t interested, setting up a rematch of last year’s budget battles between the Democratic governor and the GOP-led legislature.

This time, however, Perdue is a lame duck and education cuts are expected to be a key part of the Democrats’ battle to retain control over the governor’s office.

Lt. Gov. Walter Dalton, who won the Democrat primary on Tuesday, has sought to tie his opponent, former Charlotte Mayor Pat McCrory, to the legislative budget cuts.

Meanwhile, a McCrory spokesman on Wednesday called Perdue’s handling of the budget process “another example of why state government is broken” and said she was “attempting to pick another food fight between Republicans and Democrats.”

Perdue’s proposal calls for a three-quarter-cent sales tax increase that her advisers say is expected to raise $760 million over 11 months, or $850 million a year.

The plan includes spending about $8 billion on K-12 schools, up from $7.46 billion this year. The increase would go toward hiring or retaining 11,000 school jobs, reducing class sizes in kindergarten through third grade, and continuing and expanding use of a software program that helps teachers diagnose reading problems in young students.

The $562 million is intended to replace the $258 million in federal “Edu-jobs” money that runs out early next school year, and to reverse some of the recent “discretionary cuts” to schools. Since the 2009-2010 school year, districts have had to return nearly $1 billion to the state. This year, schools had to return about $428 million, and that is scheduled to go up $74 million next year.

“We have to reduce the deep and unnecessary cuts that the Republican-controlled legislature forced on us in all 100 counties last year,” Perdue said in a YouTube video describing parts of her budget. “The budget I submit will restore the cuts they made and prevent even deeper cuts that were scheduled for next year.”

Also included:

• $25 million more for N.C. Pre-K, which would add up to 4,579 slots

• An additional $53 million for community colleges

• $145 million more for public universities, including $35 million for financial aid

A 1.8 percent raise for teachers

Perdue had her last budget and its extension of a sales tax increase rejected last year.

Veto and override

While she pushed to extend part of a sales tax increase that was set to expire, the legislature wrote its own budget without it. Perdue didn’t want the legislature’s plan and vetoed it. The legislature canceled her veto.

Her new plan is likely to meet the same fate. Perdue, who is not seeking re-election, said about three months ago she would put a sales tax increase in next year’s budget.

In the last few months, Perdue has toured the state promoting the idea, and school superintendents invited to a State Board of Education meeting and to a legislative committee meeting talked of their districts straining under repeated budget cuts.

When Perdue first presented the tax increase proposal, Republican legislators said that it wasn’t going anywhere. They said it again Wednesday.

Rep. Nelson Dollar, a Cary Republican and budget writer, called the proposed tax increase “an anti-jobs measure.”

“The economic recovery is far too fragile, unemployment is way too high in North Carolina for us to consider adding $1 billion in new tax burdens for working families in North Carolina,” he said. “Family budgets are strained.”

Senate leader Phil Berger, an Eden Republican, said replacing federal stimulus money with state money was “the wrong approach.” Instead, the state should determine “the appropriate level of funding” and figure out how to get there.

‘We’ll take a look’

The legislative session starts Wednesday, and legislative leaders say they don’t want to stay long. Berger said he’d like the session to be over by the end of June.

Budget writers are already busy putting their spending plan together and plan to introduce it next week. Budget chairmen were at work Thursday afternoon.

Dollar said he expects the House to pass a budget “in a matter of days.”

That doesn’t leave much time for the legislature to consider Perdue’s budget proposal.

“Whatever she sends us, we’ll take a look at,” Berger said.

Bonner: 919-829-4821

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