05/20/09 — Revenue troubles stalling budget

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Revenue troubles stalling budget

By Matthew Whittle
Published in News on May 20, 2009 1:46 PM

State House leaders are working hard to pull together their version of the 2009-10 budget, but it's been a little harder of a task this year than in recent years past, Senior Majority Whip Rep. Larry Bell said.

The problem, he explained, are the state's revenue projections, which have continued to slide since Gov. Beverly Perdue first put her $20.9 billion proposal on the table back in March.

Then, revenues were projected to be about $2 billion short. Today, legislators are staring into a hole that could be as deep as $4.6 billion next year.

"We're having to do it all over again," said Bell, D-Sampson. "Things have changed. We've had to start all over again."

And, he continued, while those revenues are expected to continue to fall, it's time for the appropriation committee chairmen and the House leadership to unveil a spending plan -- something he anticipates will happen in the very near future.

"We have got to go ahead and get a budget out," he said.

In fact, Rep. Van Braxton, D-Lenoir, said, "It's my understanding that it's pretty much done, though this is a long way from being over."

He explained that he is expecting to see two drafts -- one that doesn't create any new revenue streams and one that includes $500 million worth of new monies, much like the version approved by the Senate.

Where those funds might come from, however, has not yet been defined, although tax increases on alcohol and cigarettes have been discussed.

But, Braxton said he is confident neither will be ultimately approved.

"I don't that's going to get a lot of traction," he said. "In this tough economy, I don't think anybody really has the appetite to increase revenues."

Instead, he continued, "It's my understanding that there are some pretty hefty cuts.

"But when you've got a budget that's 20 percent short of revenues, it's going to take some hefty cuts."

And Bell hopes those cuts will ultimately come across the board as a percentage to every area of state government.

"That way we can let the departments decide how best to cut internally," he said.

But however they get the job done, he added, the goal is to have a spending plan approved as close to July 1 -- the start of the fiscal year -- as possible, at least by July 4.

"We're going to try to leave as early as we can," Bell said.

On the other side of the aisle, Rep. Efton Sager, R-Wayne, didn't have much to say on the budget, only that he was reserving comment until the Democratic leadership makes its presentation. He did, however, say he is opposed to any tax increases and most fee increases.