(Update) The Republicans' budget vs. Perdue's: The gap is way bigger than it appears— Why are 5 House Dems with the GOP? | Citizen
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Thursday, June 2, 2011

(Update) The Republicans' budget vs. Perdue's: The gap is way bigger than it appears— Why are 5 House Dems with the GOP?

Posted by on Thu, Jun 2, 2011 at 9:52 AM


[Update II, 6/2, 9:30 a.m.: Progressive groups are incensed that five conservative House Democrats may upset Perdue's applecart. The five apparently will vote for the GOP budget when it comes back from the Senate. Whether they'll vote to override a Perdue veto is uncertain; it's possible that after a veto, they'll go to work on a real compromise.]

[Update I, 4 p.m.: The "bipartisan" budget passed the Senate 31-18 ... with 31 Republican votes and zero (0) Democrats. Minority Leader Martin Nesbitt's critique is added below.)

That "bipartisan budget deal" unveiled yesterday by the General Assembly's Republican leadership is anything but — at least if "bipartisan" implies that it has the support of the state's top Democrat, Gov. Bev Perdue. It doesn't, nor does it have a whole lot of support from Democratic legislators. But then again, for the Republicans to push it past the finish line, they don't need many Democrats. Just four (of the 52) House Democrats will do, and then the GOP budget becomes veto-proof, Perdue or not.

Perdue was steaming on a telephone conference call with reporters late yesterday afternoon. The Republicans portrayed their budget as a compromise, and to be fair, it does move some in the direction of Perdue's budget plan. However, the REAL difference between the two — between the $19.9 billion Perdue budget and the nearly $19.7 billion Republican budget — is actually far greater than a simple comparison of the top-line numbers would suggest.

That was the point Perdue was trying to get across, but it was late in the day, the conferencing connection was lousy, and the numbers were flying a little fast for folks like me who sort of know the budget but frankly, don't know it well enough.

A day later, and with more information coming in, it's clear that the difference between the two budgets isn't really $200 million. When all of the GOP's robbing of Peter to pay Paul is accounted for, as well as their dipping into retirement and reserve accounts, the difference is at least $600 million — or more.

[Update III, 6/2, 2;45 p.m.: Cut some, add some, shuffle the budget lines around ... The Budget & Tax Center's Ed McLanaghan's crunched the numbers some more, and he calculates that Perdue's budget invests $580 million more than the Republicans' budget does.]

This is what Perdue was talking about when she called the Republican budget "a charade of sorts" ... a "papering over" to hide the real difference between her budget and theirs. The "papering over" is so blatant, she added, that the state's AAA credit rating may be jeopardized. (North Carolina is one of eight states with a AAA rating, she said.)

In broad strokes, the Republican budget is less than Perdue's by at least* the sum of:

1) The $230 million nominal difference, plus —

2) Another $200 million that the Republicans take from Rainy Day funds ($96 million), contributions to employee retirement accounts ($52 million), and by cutting other reserve funds to the bone ($58 miillion).

3) Another $200 million in sleight-of-hand accounting (Highway Fund money counted as part of the General Fund budget).

For that third item, h/t to one of my ultra-conservative buds (I'd call his name, but maybe he'd rather I not), who sent me John Hood's daily dispatch from the Art Pope Empire. (Hood is president of the John Locke Foundation).

For the second item, and for a good summary of what the Republicans did yesterday, h/t to the N.C. Budget & Tax Center's Ed McLenaghan and his post on the Progressive Pulse.

If you think of it like a family budget, the Republicans' income is at least $630 million less than Perdue's, but they propose to spend just $230 million less. How? By raiding the family savings. Simple as that.

Perdue wants some or all of a 1-cent temporary sales tax extended for one more year — the 1-cent tax would boost revenues by some $1.1 billion. Her budget contained a 3/4-cent tax extension.

* And then there's the question of whether the Republicans are deliberately underestimating what Medicaid will cost in 2011-12 — Perdue thinks they are — which would add to the red ink.


Perdue's office, meanwhile, pushed out a press release emphasizing that, while the nominal difference in education funding between the Governor's budget and the Republican's budget is about $300 million, in fact the REAL difference is a lot more — according to Perdue, it's a $561 million education spending gap.

The reason the real gap is bigger is because, while the GOP budget "gives" about $11 billion to education (versus the Governor's budget, which "gives" $11.3 billion), it doesn't actually allow the schools to spend all the money they're given. The required give-backs make the education gap bigger.

Moreover, as Chris Fitzsimon says in post on N.C. Policy Watch:" ... here’s a reality check on the substance and the politics. The new Senate budget does reinstate funding for teacher assistants but it pays for part of it by forcing local schools to find $120 million more in “discretionary” cuts, some of which may result in the layoffs of some of the teacher assistants or teachers the Republicans claim to be saving."

The N.C. Association of Educators — the teachers association — denounced the Republican budget as a shell game that will drop North Carolina from 47th to 49th on the list of state aid to schools per student (K-12). State spending now is $8,300 per student, the NCAE said. Under the Republican budget, it would sink to $7,800 per student.

The Perdue, NCAE statements and Nesbitt statements are below.


From Gov. Perdue:

When comparing the Governor’s education budget with the Senate education budget there are clear and dramatic differences in priorities from early childhood through higher education. The Senate budget cuts investments in education $561 million more than the Governor’s budget, including $256 million to K-12, $68.9 million to community colleges, and $236 million to the university system. This includes:

Early Childhood

The Senate budget proposes 20 percent cuts to Smart Start and More at Four, two nationally recognized early childhood programs. These drastic cuts would result in the closing of local partnerships and the elimination of critical education and health programs for at-risk pre-school children.


State Senate leaders proclaim to have fully funded teacher and teacher assistant positions in their budget, but in reality they have passed down a $322 million flex cut to the local school districts which would result in thousands of teacher and teaching assistant layoffs in our public schools, with the impact on the second year of funding to be much worse than the first year. The pass downs also will pull availability from other sections of the budget to reduce education cuts.

The Senate budget would drop North Carolina to near last in per-pupil spending.

Higher Education

The Senate budget cuts the nation’s premier community college and university systems by a combined $305 million, more than the Governor’s budget. Through their budget:

· Limits access to thousands of critical workforce training classes and other programs
· Balances the cuts to higher education on the backs of students by allowing community colleges and universities the ability to raise tuition at their own discretion
· Eliminates the NC Teaching Fellows program — a nationally recognized model for teacher recruitment and development. The program is a student financial aid and skill development program that offers four year scholarships for the state’s most talented students who commit to teaching in North Carolina after graduation.


From the N.C. Association of Educators:

The North Carolina Senate’s new proposed budget agreement is a shell game that will cost the state thousands of classroom teachers and teaching assistants, and will drop the state in per pupil rankings to 49th in per pupil spending. (Mississippi will be one step ahead of North Carolina at 48th.)

North Carolina currently spends $8,303 in per pupil spending and the Senate’s proposal will drop spending to $7,807 per student.

The Senate’s sleight-of-hand budget trick has the General Assembly falsely claiming a budget compromise will restore cuts teacher assistants while adding more teachers. However, a $124.2 million discretionary cut to local school districts will be an education job killer and compromise student learning.

“We know discretionary cuts to local school systems is budget language for ‘cuts to the classroom’,” said NCAE President Sheri Strickland. “In the last two years, 88% of all cuts resulted in the loss of teachers and teacher assistants, something this new General Assembly promised to protect in the last election.”

Strickland was referring to the 2009 cuts of $225 million that resulted in the loss of 5,401 jobs in public education. The new proposed $124.2 million discretionary cut will result in 3,442 classroom teachers and 2,246 teacher assistants losing jobs.

“This budget breaks a campaign promise the legislative leadership made to the people of North Carolina,” said NCAE Vice President Rodney Ellis. “This budget also breaks a promise the legislative leadership made when they vowed to uphold our North Carolina Constitution and provide every child with a sound, basic education.”

Ellis reminded the General Assembly that an extension of a one-cent sales tax already in place would not only fund every teacher and teacher assistant, public education could be completely restored from the past three years. “The only winner in this budget compromise is Mississippi,” he said.

From Senate Minority Leader Martin Nesbitt:

North Carolina Senate Democratic Leader Martin Nesbitt today released the following statement after NC Senate Republicans voted along party lines to give initial approval to a GOP budget proposal that cuts nearly $1 billion from public education:

“The Republican budget is no compromise. It’s a direct assault on public schools that cuts nearly a billion dollars from public education. Our schools are already underfunded, yet the Republican budget will take North Carolina to rock bottom in per-student funding, behind even Mississippi and South Carolina.

“Republicans have better choices, but they’ve chosen to attack public schools. And this choice has consequences. North Carolina’s schools, colleges, and universities attract new jobs and new investment to our state. Laying off thousands of teachers and cutting a billion dollars from education will undermine job creation and economic growth now and for years in the future.”

The GOP budget plan:

Makes nearly $1 billion in cuts to public education, from schools to community colleges to universities.
Cuts nearly a half billion dollars from public schools alone.

The NC Department of Public Instruction estimates that the GOP budget will result in the elimination of nearly 9,300 public school jobs, including teachers, teacher assistants, and principals.

Would drop North Carolina to 49th in per-student funding, behind even South Carolina and Mississippi.

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