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Perdue issues additional cuts
AP
Issue date: 2/26/09 Section: News
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Perdue told most state agencies Wednesday to reduce their spending by 9 percent of their budgeted amounts for the current fiscal year. Last month, she asked for cuts of up to 7 percent.
Other agencies that weren't required to cut so deep last month have had to tighten their belts further, except for K-12 education, which remained at 2 percent, or about $160 million.
"The state constitution requires that I balance the state budget, and I will do that while protecting public education as much as possible," Perdue said in a news release.
Perdue also said the state will transfer $300 million from four special accounts into the state's general operating fund to deal with potential cash flow problems. She called that a precautionary step because the state traditionally deals with cash balance issues at this time of year.
The state will transfer $100 million each from the Clean Water Management Trust Fund and Public School Building Capital Fund and $50 million apiece from the Education Lottery Reserve Fund and Public School Textbook Fund.
The four dedicated funds currently have a combined balance of $682 million and will be managed so that the transfers won't affect account activities, Perdue's office said.
Among other large state departments, Perdue ordered the University of North Carolina system to expand cuts in the system's budget from 6 percent to 7 percent. The community college system was asked to increase cuts from 5 percent to 5.5 percent of its budget and the Department of Health and Human Services was asked to trim its budget from 6 percent to 8 percent, not including Medicaid or mental health programs.
Perdue is making the changes in part because the state will have at least $150 million less from the federal stimulus package to spend during the fiscal year ending June 30 than her budget office estimated last month. The projection was made before the bill was finalized and signed by President Obama.
Perdue said last week she had asked for additional cuts to confront a budget shortfall that her administration says could reach as much as $2.2 billion, up from $2 billion last month. The new governor is also assembling a budget proposal for the next two years that she'll present to lawmakers in mid-March.
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