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Thurs: Bad to Worse
posted at 2009-01-16 00:39 | Last modified 2009-01-16 00:55
Governor Bev Perdue issued an executive budget order today, and it was every bit as bad as anyone expected. Most agencies will face 7% cuts, though community colleges, DPI, Corrections, and HHS cuts are slightly less steep.
The order also instituted a hiring freeze, banned non-essential travel, training, and departmental spending, and put $107M worth of already-funded capital and renovations projects on hold. You can read the order here.
Perdue held an impromptu press avail early this evening on the steps of the old Capitol. Yes, that’s right -- outside, in the single-digit wind chill. (Well, it does tend to keep things brief.) She was sympathetic but unapologetic about the cuts. The latest projections put the state’s budget shortfall at around $2B, and as she points out, the Constitution pretty much requires her to do something about that.
“I’m gonna make tough, tough decisions that nobody will like, and I don’t like them, but somebody’s gotta do it, and the people asked me to do that.”
But will today’s cuts be enough? Steep as they are, they still won’t cover the whole shortfall – at best, they’ll only offset about $1.1B. Perdue’s counting on the Feds to cover the other $900M with recovery money -- over and above the proposed infrastructure stimulus package.
Cry Uncle (Sam)
The Congressional office charged with helping state officials translate the Recovery Bill say NC should be in line for at least a billion in aid, mostly via a reduction in Medicaid share, which is worth about $100M per percentage point to NC. Other help may come through school and public safety money. As Perdue put it tonight, the Feds won’t be sending us buckets of cash. But in the bigger picture, the extra federal support gives state officials more flexibility in using what cash they still have.
Of course, none of this is even close to confirmed yet. The Recovery Bill still has to make it through House, Senate, and conference, and a lot of strange things have been known to happen along the way. But Perdue’s budget chief Charles Perusse says he’s confident the $900M is a safe bet.
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Layoffs?
Of course, with 7 percent cuts, you have to wonder whether the state’s looking at job cuts. In some agencies, Perdue says, probably so.
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But after her appearance, her budget chief Charles Perusse walked that back a step or two.
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Both Perdue and Perusse say they’ll do everything they can to protect education and vital public services like health and safety. But it’s unclear how many agencies can really meet the target of 7% without jettisoning a program or two – a weeding-out some conservatives argue is long overdue, anyway.
What’s safe
Perdue says her deficit-repair plan doesn’t gut the rainy-day fund – she’s trying to keep it healthy, though that could change if things get worse. And her freeze order doesn’t apply to the slate of capital projects fast-tracked earlier this month by former Governor Mike Easley. Perdue says those projects will move forward because they’ll create badly-needed jobs. And, she says, if the state rakes in the kind of infrastructure money she’s hoping for, they’ll need some “shovel-ready” places to start.
You can hear the whole six-minute unedited Q&A below.
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Another goodbye
The Fayetteville Observer is closing its Capitol Bureau. Managing Editor Mike Arnholt said today that maintaining the bureau “didn’t make sense for us anymore” in light of the other financial challenges facing the privately-owned paper.
That’s understandable in economic terms. But it's also really disturbing on a couple of levels.
First, Fayetteville is the second major NC metro area in two years to give up on local statehouse coverage. (Wilmington closed its bureau last year.) Cumberland County has no shortage of high-powered legislators (think Tony Rand, Rick Glazier, and Margaret Dickson for starters), and it’s a microcosm of many of the state’s biggest issues, like growth, the military, and veterans' affairs. But there won’t be anyone watching the legislature on its account anymore.
Second, it means a really nice guy is out of a job -- reporter John Fuquay got downsized along with his bureau. Friday’s his last day at the Fay-O. I'm sure I'm not the only one sorry to see him go.
Comments? Drop me a line.
