In the next few weeks we will be seeing cuts proposed in the state budget. We do not have any knowledge yet as to what programs will be cut but we are asking you to keep a close eye on your emails and be ready at a moments notice to come to Raleigh if you get the call!
Thank you.
Lou
Fitzsimon File
Redefining what's politically possible.
Most legislative business ground to a halt Wednesday morning as lawmakers crowded into a committee room to hear the latest budget and revenue figures that House Appropriations Ch air Mickey Michaux promised would include good news and bad news.
The bad news wasn't hard to figure out. State revenues for the current fiscal year are now $3.1 billion less than expected. That's almost a billion dollars worse than the revised forecast made in January, and $1.3 billion less than the amount assumed in the budgets submitted by Governor Beverly Perdue in March and the one passed by the Senate last month.
As gloomy as they were, the numbers weren't really news. Perdue released basically the same figures last week when she announced furloughs of state employees and her plan to use the state savings account and $200 million of federal stimulus money originally slated for next year to balance the current year's budget.
That adds to next year's shortfall and means the House will have to come up with $1.5 billion in more in new revenues or deeper budget cuts than the Senate plan.
The numbers are startling. The new state revenue forecast for the fiscal year that begins July 1 is now $17.5 billion, more than $4.5 billion less than the amount needed to keep state services at current levels, a shortfall of 20 percent, unprecedented in recent history.
The House budget process is well underway and budget writers expected to release specific subcommittee targets late Wednesday afternoon and they are not likely to account for the $500 million in new revenue the Senate budget includes.
The Senate plan cuts 300 jobs at the Department of Public Instruction, which would make it virtually impossible for the state education officials to offer much help to local school systems or adequately monitor their progress as part of an accountability program.
The Senate budget also makes deep cuts to early childhood programs and nonprofits that provide vital programs like alternatives to prison that save the state money in the long run.
The House must cut $1.5 billion deeper, more if they don't raise the same $500 million the Senate plan included. Key House budget writers say privately they don't think it's possible to raise more than that, but that's a political calculation, not a decision based on sound economics or consideration of what even more devastating budget cuts will do to the state safety net and core institutions.
The Center for Economic and Policy Research released a report this week showing that slashing state budgets actually reduces the benefits of the federal stimulus package, slowing the economic recovery. The Center on Budget and Policy Priorities argues that raising taxes on the wealthy does far less damage to a state's economy than sharply cutting state services at a time when more people need help making ends meet.
House leaders ought to keep an open mind about how much revenue they should raise. There's no hurry to pass a budget. The current fiscal year doesn't end until June 30, leaving plenty of time for hearings to explain what another $1.5 billion in cuts would mean to families who need help taking care of a disabled son, to schools already struggling to provide the sound, basic education the state constitution requires, and to troubled teenagers who stay in school now because of after school programs.
House budget writers should also look under every rock and consider suspending or delaying programs that can wait a year or two. Surely the residents of Bald Head Island can wait another year to have new sand pumped onto their beach so children in working poor families can see a doctor.
The latest revenue numbers don't mean that the needs in the state have decreased. The opposite is true. More people need help than ever.
In case you are wondering about the good news Michaux promised at the beginning of Wednesday morning's meeting, he said the good news was that "hopefully there won't be any more bad news."
Hopefully that means that House budget writers won't balance the budget on the backs of school kids and poor families, and will instead muster the political courage to redefine what is politically possible. |
