Perdue’s mixed bag of a budget

Perdue’s mixed bag of a budget

- in Fitzsimon File

There were few surprises in the budget Governor Beverly Perdue released this week, no tax increases, a few important new jobs initiatives, more painful cuts to education and human services.

The budget is a reflection of the perceived political climate in which elected officials seem scared to even discuss new revenues, even if it means cutting dental services and eye care for people on Medicaid or asking schools to find more cuts on top on last year's reductions that resulted in teacher layoffs and larger classes.

Perdue also largely declined to take on sacred cows to avoid the cuts. She didn't mention ending the in-state tuition subsidy for out of state athletes or diverting some of the state's annual payment from the national tobacco settlement.

Despite that flawed and limiting framework, she deserves credit for creative thinking in how she allocated the money she wants to spend.

One notable example is her Back to Work Incentive Fund that would provide $1000 per job subsidy to small businesses that add jobs by hiring workers who have been unemployed for more than 60 days.

Perdue also makes some important investments in repairing the gaping holes in safety net like restoring $40 million that was cut from mental health services in the final hours of last session's budget negotiations.  That only gets the system back to less than zero, the underfunded state it was in before the cuts, but at least it's not going further backwards.

Perdue also allocates $14 million for the AIDS Drug Assistance Program that provides lifesaving medication for people infected with HIV who can't afford it.  The program stopped taking new applicants earlier this year and now has a waiting list of more than 300 people.

The new money would significantly reduce that waiting list, but not eliminate it since the money would only pay to enroll people who earn less than 125 percent of the federal poverty level.  People with incomes of up to 300 percent of poverty are normally eligible for the program.

Perdue wants to give teachers a step increase in the salary schedule, which comes to a raise of around 1.8 percent. and proposes fully funding enrollment increases at community colleges and the university system, though UNC President Erskine Bowles believes other cuts proposed to UNC would do serious damage to the university's core academic mission. 

There's plenty more to consider including Perdue's proposal for a new Mobility Fund to address critical transportation projects, which seems like an odd recommendation given the unwillingness to take a hard look at how current transportation dollars are spent, as Stephen Jackson of the N.C. Budget and Tax Center has pointed out.

Overall, Perdue's budget calls for $19.1 billion in General Fund spending, $410 million less than the budget authorized last session for next year.  Add in federal stimulus money and the total comes to $20.8 billion.

That has prompted the usual response from the anti-everything crowd claiming like they always claim that the budget spends too much and Perdue could have cut millions more from state programs.

Those would be the same voices complaining about the cuts to education made last year and neglecting to mention that even with the federal stimulus money, Perdue's budget would spend less than the pre-recession budget of $21.3 billion despite population growth, higher enrollment at all levels of education, and skyrocketing Medicaid costs.

The state does not have a spending problem. The budget debate has a right-wing rhetoric problem.

Now Perdue's plan goes to the state lawmakers and let's hope they use it a starting point and make it better by adjusting the framework she used and finding more money to protect public education and restore some of the services that the most vulnerable people in the state have lost.

Calls from the Right to make more cuts need to be ignored. We can't afford to keep going backwards.

About the author

Chris Fitzsimon, Founder and Executive Director of N.C. Policy Watch, writes the Fitzsimon File, delivers a radio commentary broadcast on WRAL-FM and hosts "News and Views," a weekly radio news magazine that airs on multiple stations across North Carolina.
chris@ncpolicywatch.com
919-861-2066