MEDIA RELEASE: Together NC calls governor's budget "a good start" to meeting a challenging budget environment

The 108-member coalition sent a letter to lawmakers Monday urging them to continue taking a "balanced approach" with seven common-sense strategies for resolving North Carolina's budget crisis

RALEIGH (April 21, 2010) - The worst economic crisis since the Great Depression continues to hit North Carolina hard, impairing the state's fiscal outlook and challenging lawmakers. But, says Together NC, Gov. Bev Perdue's proposed budget is a solid starting point that preserves vital public investments.

"Gov. Perdue's budget proposal is a good starting point when considering the economy's impact on our state's finances," said Meg Gray Wiehe of the NC Justice Center, a Together NC organizer. "The Governor maintained investments in several key programs and re-affirmed a commitment to essential institutions like public safety, health and education. At the same time, there are extensive cuts in her proposal that will be difficult for the people of North Carolina to absorb."

The budget adds $8.5 million to the well-respected NC Health Choice program, allowing 8,100 more children access to health insurance. Especially important in tough economic times is the $85 million to meet enrollment demands in the community college system. This is a 15.8 percent increase over 2009-2010, and will help about 34,118 full-time equivalent students advance their education and job skills.

Reflecting the state's sobering economic realities, the governor's budget does contain $950 million of painful cuts on top of more than $2 billion approved last year. The cuts help to close an additional $1.2 billion budget gap resulting from lower than anticipated revenues and increased demand for public programs such as health insurance for low-income residents and job training.

Cuts to Medicaid's "optional" services, which include such basic programs as eye care and preventative dental care, will impact thousands of families - and leave numerous dollars in federal matching funds on the table. Local school districts will have to absorb $135 million in additional cuts beyond the $305 million reductions approved last year. This will have a substantial impact on the classroom.

To create a budget that works for all North Carolinians requires a comprehensive approach based around seven strategies. Representatives of Together NC delivered these strategic ideas to all state lawmakers in a joint letter Monday urging them to continue to take a balanced and responsible approach to the budget crisis.

"As we move forward in the budget negotiations, Together NC believes we must re-affirm the need for a balanced approach," said Rob Thompson, Executive Director of the Covenant with NC's Children and organizer of Together NC. "A cuts-alone approach simply won't work, and would actually harm North Carolina's families and economy. Instead, lawmakers should leave all options on the table in terms of maintaining our public investments."

Among the strategies Together NC advocates are:
  • using all available resources wisely, such as the rainy day funds and federal recovery funds;
  • eliminate ineffective tax expenditures, like special tax exemptions that don't create jobs;
  • find efficiencies;
  • improve tax collections by aggressively seeking taxes that are owed but have gone unpaid;
  • prioritize when making cuts, making careful decisions that are based on how effective programs are at achieving goals;
  • pay close attention to future impact;
  • and raise revenues through strategies like closing corporate tax loopholes and expanding the sales tax to some services.

"No one approach can guide us through this economic crisis," said Wiehe. "The governor has shown us her priorities are in the right place by maintaining several important investments. However, we must continue to explore every option we have as the budget process moves into the Senate's hands."

FOR MORE INFORMATION, CONTACT: Jeff Shaw, communications director, North Carolina Justice Center, 919.863.2402 (office) 503.551.3615 (mobile); Meg Gray Wiehe, NC Justice Center, 919.856.3192; Rob Thompson, executive director, Covenant with North Carolina's Children, 919.866.3280 (office)  919.649.2449 (mobile),