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Budget proposes school funding restoration

May 9, 2012

Gov. Beverly Perdue's proposed budget adjustments for next year would use most of the proceeds from a sales tax increase to restore cuts that North Carolina school districts have been forced to make since 2009.

Perdue will release her nearly $21 billion plan Thursday, but a document provided by the Democratic governor's administration to reporters Wednesday provided details on her proposal.

The governor wants to spend $562 million, or 7.5 percent, more on the public schools budget than what the current budget mandates for the year beginning July 1. The Legislature returns to work next week to adjust the second year of the two-year budget approved last year for necessary changes or policy initiatives. GOP legislators that run the General Assembly are opposed to a higher tax.

Additional funds in Perdue's plan come from a three-quarter cent increase in the sales tax that Perdue has said for months she would recommend to restore $459 million in public school reductions from last year's Republican budget. The public schools budget is more than one-third of the state budget.

In a video released late Wednesday, Perdue said the extra funds could help save or create more than 11,000 education positions.

"We have to reverse the deep and unnecessary education cuts that the Republican-controlled General Assembly forced on us in all 100 counties last year," Perdue said. "The budget I submit will restore the cuts they made and prevent the even deeper cuts that were scheduled for next year."

Perdue and her lieutenants have said the additional revenues can make up for $258 million in federal funds used by districts over the past two years to preserve thousands of teacher and teaching-related jobs but are now going away. They believe the public will support the higher tax — causing the base sales tax most consumers pay to rise from 6.75 percent to 7.5 percent — if it means improving education.

Republicans in charge of the Legislature have said they aren't considering higher sales taxes this year, especially since they ran on a platform in 2010 to do away with a temporary penny sales tax created by Democrats in 2009. The GOP allowed it to expire last July despite Perdue's recommendation to leave most of it in place.

"I don't know how many times you have to say that's not the direction we're going in," said Senate leader Phil Berger, R-Rockingham. "Raising the sales tax takes money away from people and puts it in the hands of government. It's the solution that we saw for years from the Democrats."

The Perdue budget would make up for the expiring federal money by eliminating mandated "discretionary" cuts by the state's 115 school districts that began in 2009 when the Democrats were in charge of the Legislature. The Republicans expanded the level cuts last year and they're on track to grow by $74 million next year, reaching $503 million.

Local school superintendents have pleaded with the State Board of Education and lawmakers to do away with the discretionary cuts they say have left them with fewer areas to find savings that don't damage classroom instruction. The public schools reported 4,840 fewer educators employed this school year compared to last year. Republicans said they actually set aside more state funds for 1,100 additional teachers.

Berger said fellow Republicans are looking for a way to eliminate the $74 million increase but he reiterated the solution to improving schools isn't just about throwing more money at them. He's presented his own package of education reforms that would cost $45 million more to implement next year. A three-quarter cent increase would be projected to generate $760 million in state revenue next year.

Perdue vetoed the GOP-penned two-year budget in large part due to cuts to public education and health care, but Republicans overrode her veto with assistance from five House Democrats. The House has been working on its own budget proposal and is on track to release it next week.

There could be places of agreement between the executive and legislative branches. Perdue and Berger both support the expanded use of electronic diagnostic tools to improve reading in early grades.

Perdue, who also planned to talk about her budget proposal later Thursday in Winston-Salem and Charlotte after its unveiling in Raleigh, said in her video her budget proposal also would give a tax credit to small businesses that hire the unemployed or veterans and would provide higher education tuition assistance to veterans and their families.

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