Budget Push

Budget Push

House budget subcommittee chairs were given spending targets -- as much as $100 million dollars below amounts included in Gov. Mike Easley's budget -- as legislative budget writers pushed toward a timetable that has the General Assembly approving a spending plan by June 27. Figures released by legislative staff on Wednesday put estimated General Fund revenue at $21.179 billion, which was $353 million less than that in Easley's plan. The figures did not include $165 million in cigarette and alcohol tax increases endorsed by the governor and pretty much dismissed by legislative leaders.

The initial legislative proposal shows $183 million more put into Rainy Day Fund reserves and the Repair and Renovation Fund. Easley's budget put a total of $126 million into the two funds. Legislative budget writers acknowledged that the reserve amounts might change. "Every number is subject to change," said Sen. Linda Garrou, D-Forsyth, a co-chair of the Senate budget writing committee. "We need to look carefully at how we fit all these pieces of the puzzle together." Rep. Jim Crawford, D-Granville, said the House might well look at using some portion of the money as a way to finance state employee pay raises. State law requires that half of remaining fund balances at the end of the fiscal year be rolled into the two reserves.

The $309 million put into the reserves in the preliminary revenue availability would meet the statutory requirement based on an estimate that $619 million will remain unspent on June 30. Of course, the legislature makes the statutes. It could change the requirement or simply appropriate money from the reserves in the next fiscal year. Without any additional cuts to the budget, the figures show $485 million available for new spending. But teacher bonuses, education enrollment increases and $42 million to meet rising gasoline costs for school systems -- an item not included in Easley's budget -- reduced the amount to $289 million.

House budget writers are mulling over spending targets with a deadline to prepare a budget bill in three weeks. The same timeline has the House approving a budget bill by June 6, with the Senate voting on its plan two weeks later and budget negotiators starting to work through differences by June 20.

(THE INSIDER, 5/15/08).