Democrats Warn of Spending Cuts
Budget talks have reached an impasse in the General Assembly, and legislative leaders say a hard decision must come next week on whether to raise taxes or slash government services to plug huge holes in the state’s finances.
Democrats, in a last-ditch effort to build public support for higher levies, warned Thursday that education and human services would sustain deep cuts and see some new initiatives shelved unless lawmakers bring in more money.
Among the casualties could be pay raises for state employees and teachers, smaller class sizes and preschool for disadvantaged children.
”To those who think we’re up here like the little boy crying wolf, that’s not the case,” an appropriations leader, state Rep. David Redwine, said at a meeting of House and Senate budget negotiators.
”The situation we’re in, everything – everything – is on the table,” said Redwine, D-Brunswick, ”because we’ve got to decide what to do if it’s the will of this body not to increase revenue.”
Republicans chafed at the dire predictions and accused Democrats of frightening North Carolinians so they would lobby for higher taxes.
”It was showmanship,” said House Minority Leader Leo Daughtry, R-Johnston. ”It was an opportunity to paint a picture to convince members of the House and Senate that it’s time to raise taxes.”
The tense standoff was only one episode from a grueling budget year in the legislature. Many factors, including the faltering economy and low money reserves, have produced the worst fiscal crisis for North Carolina in a decade.
Another complication came last week when lawmakers revised how much money they expect the state to collect in the 2001-02 fiscal year, which began this month. Estimates stand at slightly less than $ 14.3 billion, a drop of about $ 170 million.
House and Senate leaders have recommended higher taxes on wealthy households, sales and alcohol to balance the budget and rebuild the emergency reserves, or ‘ ‘rainy day fund.” Most Republicans and a few conservative Democrats have resisted.
Concerned about dragging the budget debate into late summer, House Speaker Jim Black, D-Mecklenburg, said he was prepared to end deliberations early next week and force his colleagues to back higher taxes or proceed with cuts.
”We’ve been here long enough,” Black said.
At a tightly scripted meeting, appropriations chiefs issued an ultimatum to
lawmakers: Without new revenue, the final budget must incorporate the deepest cuts from spending measures the House and Senate already adopted. Also, any new programs would be tossed out, they said.
Even so, leaders noted, another $ 100 million must be found to balance the 2001-02 budget.
At risk are salary increases – $ 625 a year for state employees and roughly 3 percent for teachers. The amount of money paid doctors who treat low-income patients on Medicaid also might be trimmed.
Several education initiatives Gov. Mike Easley has pushed are threatened. They include his More At Four voluntary preschool program, smaller kindergarten classes and an annual stipend for teachers to buy classroom supplies.
Budget writers cautioned that the state’s soft economy will hurt the 2002-03 budget and possibly revive discussions about closing the Dorothea Dix mental hospital in Raleigh and schools for the deaf in Wilson and Morganton.
”If we make these cuts so deeply and irresponsibly, our people are going to suffer,’ said Sen. Fountain Odom, D-Mecklenburg.
Republicans balked at the Democrats’ predictions and urged cuts that would not hurt children and other vulnerable people. Senate GOP members suggested eliminating hundreds of vacant state jobs and consolidating the state’s job-training programs.
Senate Minority Leader Patrick Ballantine, R-New Hanover, accused Democrats of using ”scare tactics. This was a desperate move.”
However, it already has started to work. Hours after the appropriations meeting, the N.C. Association of Educators sent a computer message alerting its members about the budget-cut options and urging them to contact legislators.
”These proposed cuts are a surrender from North Carolina values and a retreat from the state’s commitment to its children,” NCAE president Carolyn McKinney said in a statement.
Meanwhile, the group that has led the charge against higher levies plans to continue its lobbying campaign over the weekend, focusing on lawmakers who signed a pledge to hold the line on taxes.
”We’re not going to back down one iota,” said Linda Hunt Williams, deputy director of N.C. Citizens for a Sound Economy. ”The people of North Carolina are already taxed to death.”
