Gov Bev Perdues veto Friday of the proposed $20.2 billion state budget leaves schools, courts and college students on scholarships facing an uncertainty they havent experienced in years.
The impasse between the Democratic governor and the Republican-led legislature may mean lawmakers will finish work in a few days without putting a revised budget in place.
Perdue said she wants to draw legislative leaders into negotiations.
She has made at least two suggestions in the last week for spending about $100 million more on K-12 schools, probation officers and other items by using money from reserve accounts or an unexpected bump in revenue. Legislative leaders have rebuffed her suggestions, and said they dont intend to rework the budget.
The revenue bump that Perdue is referring to comes from businesses not yet claiming a new $3,500 tax credit, law makers said. Because businesses still have time to claim the money, the state cant spend it, Sen. Bob Rucho, a Mecklenburg County Republican, said on Thursday when Perdue first suggested the idea.
I really tried to forge a consensus with them, Perdue said. Ultimately, they told me No. They said, Take it or leave it. I refuse to give up.
Flanked by two large signs listing Top 20 Budget Flaws, Perdue said the legislatures plan falls short in many areas. But the budget discussion isnt about money, she said, but about the states priorities and future.
House Speaker Thom Tillis said Perdues spending suggestions were structurally flawed, and that she is holding up progress for the sake of one-half of 1 percent in a $20.2 billion budget.
It must be all about ego, Tillis said. The governor is willing to take pay raises away from state employees and teachers. Shes willing to take classroom funding away and were trying to fill a hole because federal funding is going away. Were increasing state spending. It sounds more political to me than principle.
In odd-numbered years, as they did in 2011, the legislature approves a two-year budget. In even-numbered years, they make adjustments to the spending plan they approved the year before.
Under the two-year budget approved last June, school districts have less to spend next year. When the expiring federal money is considered, their accounts drop by $333 million. House and Senate leaders softened that blow when they revised the budget this month; schools would have about $190 million less next year. They also added $18.6 million more for UNC need-based financial aid, and put the Family Court program, where domestic and juvenile cases are handled, back on a steady source of funds.
The association for school superintendents is advising school leaders to tell legislators and Perdues office how the cut would hit their districts and urge them to work together to address the looming shortfall of $333 million.
The legislatures budget also gave 1.2 percent raises for state employees, teachers and other school personnel the first raises theyve seen in four years. Those raises wont happen if the veto stands and no compromise is reached.
In her news conference, Perdue spoke directly to teachers and school employees, saying that she wants them to have raises and gave them more in her budget proposal.
While most would get raises in the legislatures budget, she said, some teachers and state employees will lose their jobs.
Raises for some and pink slips for others is not the right thing, she said.
Picking up the attack launched by legislative Democrats, Perdue said legislators should not give tax breaks to some of the states wealthiest residents while failing to do enough for schools. Legislators passed the tax break last year.
I simply dont believe as a citizen that the General Assembly should give tax breaks to equity partners in law firms, to lobbyists and other wealthy business owners while they leave the needs of our classroom and our state unmet, she said.
The new tax break is expected to cost the state $336 million.
Tillis countered that Perdue proposed to cut the corporate tax rate, a break that would have gone to large businesses.
This is the second year in a row that Perdue has vetoed the budget. Last year, the House and Senate were able to cancel her veto, with five House Democrats joining Republicans in an override.
This year, six Democrats voted for the Republican budget. Friday, four of the six were uncertain how they would vote on an override. One of the Democrats, Rep.Timothy Spear of Washington, has been absent, dealing with the death of his father and a family illness. So far, only Rep. William Brisson of Dublin has indicated he would continue to support the GOP budget and vote for the override.
Well be back next week on Monday or Tuesday to take up a veto override if we have sufficient votes, Tillis said.
The last time legislators left Raleigh without adopting a new second-year budget was in 1996, when differences over how to spend a budget surplus sent the Democratic Senate and the Republican House home without an agreement.
Then-Gov. Jim Hunt called legislators back to work the following week for a budget session, and they worked out a deal.