GOP lawmakers give McCrory budget warm welcome

jfrank@newsobserver.comMarch 21, 2013 

— What a difference a year makes.

Gov. Pat McCrory’s $20.6 billion budget plan received favorable reviews Thursday from his Republican brethren in the legislature, who called it a template, rather than the doorstopper sent by his Democratic predecessor.

“I feel like the general direction is a lot like the family follows at the kitchen table,” said Rep. Marilyn Avila, a Raleigh Republican, “saying what do we have to pay for, what do we have to plan for?”

The partisan advantage and the improving economy made it much easier on McCrory, compared to the recession and budget deficits that hit former Democratic Gov. Bev Perdue.

McCrory is the first Republican governor in 20 years. But Art Pope, McCrory’s budget director, still faced tough questions at a Thursday morning legislative briefing – particularly about a reshuffling of education and economic development money.

Fielding lawmakers’ questions for an hour at the legislative office building, Pope defended the cuts to education and those to economic development entities.

The budget takes $10 million a year from N.C. Rural Economic Development Center and diverts $65 million from the federal tobacco case settlement destined for the Golden LEAF Foundation. Both organizations are designed to help lure companies and promote economic development in poor areas of the state.

Another $10 million was cut from the N.C. Biotechnology Center, which promotes startup companies in one of the state’s best growth sectors.

“These are items which give me deep concern, particularly when I look the fact that we are trying to grow this economy, we are trying to get people employed,” Sen. Floyd McKissick, D-Durham, said. “It’s something that’s hard to understand and justify.”

Pope told lawmakers that the governor wanted to bring more transparency to the state’s economic development efforts and centralize them within the Commerce Department, as opposed to sending money to entities outside state government.

Dan Gerlach, the Golden LEAF president, said the foundation’s spending is transparent because grants are listed on its website.

“It’s not a budget emergency so the idea of diverting money away to the state, with no clear sense of how it is used, does not make sense to me,” he said.

Billy Ray Hall, president of the rural center, said the cuts were a surprise – especially given the governor’s pledge to do more to help rural areas, where higher unemployment and poverty is pervasive.

“This is going to cost rural areas our ability to participate in creating about 2,000 jobs there,” he said. “It potentially slows the recovery of rural areas.”

The center offers grants to local governments to improve the infrastructure, such as roads, needed to recruit companies. In eight years, 650 projects have helped create 20,000 jobs, he said.

Democrats also pressed budget writers about the $11 million diverted from 14 entities that traditionally receive small portions of state commerce money, such as the Land Loss Prevention Project and the N.C. Indian Economic Development Initiatives.

“These organizations are primarily minority organizations that provide a lot of support to low-wealth communities,” said Rep. Alma Adams, a Greensboro Democrat. “It is insensitive in my opinion to remove three or four organizations completely out of the budget. I’m not sure the governor understands the value these organizations bring.”

Pope said the minority organizations were not singled out and the governor is open to reconsidering the cuts in collaboration with lawmakers as the budget moves through the process.

The state Senate has started the legislative budget-writing process and expects to deliver its budget in early May.

Budget co-chairman Sen. Pete Brunstetter, R-Winston-Salem, said lawmakers are not far from the governor in terms of state spending. But he said they will probably make changes.

“Now you have the legislative branch and executive branch generally pulling in the same direction and that also has a tendency to lower the volume in terms of disagreements,” he said. “That being said, we have 50 senators and 120 House members, and it’s just not that tidy.”

Frank: 919-829-4698

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