In her 2011-12 budget plan, released yesterday, Governor Beverly Perdue has devised a way to close the State of North Carolina's $4.4 billion gap between expected revenue and planned spending over the next two years, $2.4 billion in 2011-2012 and $2 billion in 2012-2013.
Perdue's budget plan calls for $19.9 billion in spending during fiscal year 2010-11, $3.2 billion less than was spent in 2010-11, and $1.5 billion less than was spent in 2008-09 - the last fiscal year before Perdue took office. Such spending decreases are made even more difficult by the fact that North Carolina has increased its population by 400,000 since 2008-09.
The $4.4 billion budget gap was filled by 70 percent cuts and 30 percent revenue, according to a news release from the Office of Governor Bev Perdue on Thursday.
Some of the proposed budget cuts include a temporary halt on salary increases for state employees, including teachers; a requirement of state employees on the more generous health insurance plan to pay a $21.50-per-month premium for individual coverage (a projected $89 million savings); a 35-percent, $40 million, reduced allotment for textbooks; and a $252.6 million reduction in funds to the University of North Carolina system, to be offset by tuition increases.
Despite the many deep cuts to public education funding, Perdue's office was proud to report, in the aforementioned news release, that "the plan preserves every existing, state-funded teacher and teacher assistant position," soothing a fear that was instigated, in Nov. 2010, by the Department of Public Instruction's analysis of Perdue's preliminary budget recommendations. There would be a loss of administrative and other education-related positions, however.
The Office of State Budget and Management compiled a list of the highlights of Perdue's proposed 2011-12 budget, published below. For those who are so inclined, the thousands of pages of the actual budget documents
are also accessible through the OSBM's Web site.
Among the following list of highlights: For tax changes, the figures are the amount of revenue generated or lost; for spending changes, the figures are for the amount spent or saved, compared to what was projected to maintain current services.
Governor Beverly Perdue at a press release on the proposed budget, Thursday. (Photo/property of Gov. Beverly Perdue)
Taxes, reserves or salaries
extend 0.75 cents of the temporary penny sales tax for another two years: $827 million.
reduce corporate income tax rate from 6.9 percent to 4.9 percent: -$115 million.
repeal law giving portion of corporate income tax for public school construction: $72 million.
provide unemployment insurance tax credit for 135,000 small businesses: -$65 million.
no salary increases for state employees, teachers
cover expected 7.1 percent premium increase for state employee health insurance plan: $117.1 million.
require state employees on more generous health insurance plan to pay $21.50-per-month premium for individual coverage: -$89 million.
provide $10,000-$20,000 incentive bonus for eligible workers to retire, allocated in limited amounts throughout state government.
set aside $75 million from year-end credit balance for repairs, renovations of government buildings.
contribute more to state retirement system: $115 million.
severance reserve for laid-off state workers: $30 million.
rainy-day reserve fund: $150 million.
set aside $25 million from year-end credit balance to help local governments and nonprofits interested in consolidating or regionalizing services.
require local school district to pay for workers' compensation claims: -$34.7 million.
make payments of tort claims a local responsibility: -$4.6 million.
reduce allotment for local central office staff by 10 percent, potentially eliminating 140 positions: -$10.8 million.
reduce instructional support allotment by 5 percent, potentially eliminating 290 positions: -$23 million.
reduce school building administration funds by 7.5 percent, potentially eliminating 380 positions: -$24.6 million.
35 percent allotment reduction for textbooks: -$40 million.
reduce allotment to districts for custodial and clerical positions by 15 percent, or 1,700 positions: -$59.6 million.
reduce school bus transportation allotment by 10 percent, or potentially 1,900 positions: -$40.3 million.
make school bus replacement a local responsibility: -$56.9 million.
direct 10 percent reduction in Department of Public Instruction, or 40 positions: -$4.4 million.
eliminate dropout prevention grants: -$13 million.
pay for instruction supplies and positions to teach an extra 5,323 students in 2011-12 school year: $38.3 million.
University of North Carolina system
direct University of North Carolina system to reduce combined spending in operating budget by 9.5 percent, with 1,900 positions to be eliminated, partially offset by tuition increases: -$252.6 million.
reduce legislative aid to residents who attend private college by 6.5 percent: -$12.2 million.
reduce 25 percent charity care subsidy to UNC Hospitals: -$11 million.
operation and maintenance of new system building coming online next year, including 283 positions: $18.5 million.
pay for instruction of additional 2,337 students in 2011-12 school year: $23.3 million.
consolidate research stations and farms at N.C. State University: $8.7 million.
use N.C. Education Lottery Funds to help pay for need-based financial aid: $34.9 million.
eliminate eight specialized centers and programs: -$3.8 million.
raise tuition by $5.50 per credit hour, or $176 per year: -$25.3 million.
direct 3 percent reduction in state aid budget to community college system, with as many as 620 position eliminated: -$32.3 million.
pay for instruction of additional 9,712 full-time equivalent students in 2011-12 school year: $17.9 million.
Health and Human Services
find efficiencies in department budget to reduce 25 positions: -$1 million.
reduce Smart Start early childhood initiative by 10 percent: -$9.4 million.
create up to 5.5 percent assessment on hospital and other Medicaid providers as a way to draw down more federal funds: -$60.2 million.
adjusting Medicaid provide reimbursement rates, for private duty nursing, imaging and ultrasounds: -$8.4 million.
modify Medicaid pharmacy services to find efficiencies: -$15.9 million.
modify optional and mandatory Medicaid services: -$16.5 million.
set aside $75 million in year-end credit balance for mental health trust fund.
reduce administrative funds to operate local mental health management offices: -$3.3 million.
Justice and Public Safety
consolidate Departments of Juvenile Justice, Correction and Crime Control and Public Safety into one Department of Public Safety. Sixty positions would be eliminated.
reduce administrative functions in judicial branch by 16 percent, or 54 positions: -$9.1 million.
reduce funds for family and drug treatment courts, dispute resolution and other programs: -$1.9 million.
reduce courthouse operations expenses by 1 percent, or 71 positions: -$3.3 million.
shift requirement that sheriffs check whereabouts of registered sex offenders by first-class mail, not certified mail: -$93,000.
close Woodson Wilderness Camp for juvenile offenders, eliminate 20 positions: -$970,000.
close Swannanoa Youth Development Center, affecting 26 positions: -$1.4 million.
eliminate 77 correction positions: -$2.9 million.
find $12.4 million in savings, eliminate 237 positions from Justice Reinvestment recommendations.
fund operations and staffing for four new prisons, including 280 positions: $10 million.
Natural and Economic Resources
merge Employment Security Commission into Department of Commerce, resulting in 53 position eliminations.
close welcome centers two days a week, privatize them in 2012-13 fiscal year: -$600,000
One North Carolina Fund economic incentives initiative: $10 million.
Job Maintenance and Capital Development Program: $8.5 million.
direct reductions at Department of Agriculture at agency's discretion: -$5.2 million.
reduce Department of Environment and Natural Resources by 68 positions, largely in permitting offices: -$418,000.
close Rendezvous and Turnbull Creek educational state forests due to low attendance: -$131,000.
reduce Division of Parks and Recreation budget by 10 percent, requiring most parks to close two days a week: -$3.1 million.
matching money for clean and drinking water revolving funds: $14.5 million.
Clean Water Management Trust Fund: -$50 million.
reduce public transportation, aviation and ferry funds: -$6.9 million.
repair, replace and maintain ferry vessels: -$2.1 million.
Other state agencies
consolidate Department of Administration, State Controller's Office, Office of Information Technology Services and Office of State Personnel into a new Department of Administration and Management, reducing 21 positions and other human resources jobs.
delay filling intern positions at the General Assembly: -$1.25 million.
eliminate four positions from the Officer of the Governor: -$433,000.
purchase land buffers for military installations: $1 million.
reduce six positions in State Auditor's Office: -$784,000.
increase Department of Insurance company and insurance adjuster licensing fees: -$4.5 million.
pay for new Department of Revenue tax computer system: $3 million.
reduce grants for arts, libraries, NC Symphony by 10 percent: -$2.3 million.
consolidate, reduce management layers at North Carolina State Library, eliminating nine positions: -$500,000.
centralize human resources functions, cutting 92 positions: -$2.8 million.