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Perdue Budget Protects Teachers, Extends Most Of Sales Tax Hike

Gov. Bev Perdue released her proposed budget in Raleigh earlier today. The $19.9 billion plan would protect existing teacher and teacher assistant jobs, but it would eliminate about 10,000 other state jobs. Jessica Jones of North Carolina Public Radio filed this report. Gov. Perdue says North Carolina 's severe belt-tightening over the last two years has begun to pay off. Services were cut and workers were furloughed, slashing more than half a billion dollars. Perdue says the state also froze salaries and programs- which saved about $350 million. She also said in a news conference Thursday out that this budget is $2.2 billion less than 2008-09. She says that breaks down to 11 percent less per-capita when taking into account new residents. Still, the governor says new a slight increase in revenues means teacher jobs are saved in her budget. "The budget that I've sent to the General Assembly preserves every state funded public school teacher and teacher assistant that is now working in North Carolina 's schools- every single funded teaching position." But the rest of the governor's proposed budget is full of deep cuts to state departments. She wants to consolidate 14 state agencies into eight and eliminate about 10,000 state jobs. And wants to give employee an incentive to retire early - payments of between $10,000 and $20,000. "State employees have an opportunity to take the early retirement, provides a one time incentive you heard me talk about at the State of the State," Perdue said. "Every single agency has a pot of money that will allow them to work in their department to help state employees who choose to do that who are nearing retirement age." The governor estimates about 1,000 workers would choose this option. Trimming the number of existing state jobs is expected to save the state more than $200 million. But Perdue's budget also lays out her plan to lower the state's corporate tax rate to 4.9 percent. It's currently at 6.9 percent - the highest in the Southeast. "It reduces the tax burden for corporations and small businesses by almost $500 million," Perdue said. The governor's budget would also maintain most of a 1 percent temporary sales tax hike enacted two years ago by a Democratic-led Legislature. The tax is scheduled to end this year, but Perdue wants to extend it at a slightly lower .75 percent. Republican House Speaker Thom Tillis doesn't like that idea. He says keeping that temporary tax inflates the state's economic picture by tens of millions of dollars. "We think that the governor and the Republican members who ran on the promise to sunset those taxes, should sunset those taxes," Tillis said. "So we're concerned that three fourths of about $800 million of the revenue assumptions premised on the assumption that the sunset will not occur, and that those taxes will be imposed on North Carolinians." Tillis and other Republican leaders say there are some things they like in the governor's proposed budget, such as protecting teaching jobs. But they think state government should be streamlined far more than the governor suggests. "Many private-sector entities have already reduced their head counts 10, 20, 30 percent in some cases," said Sen. Pete Brunstetter, R-Forsyth and co-chair of the Senate Appropriations Subcommittee. "A lot of the positions that I think that are in there kind of the low-hanging fruit kind of positions. They're eliminations of vacancies or positions that historically have not been filled." Brunstetter says he and other Republicans will look at eliminating entire programs if they have to, as they search for more ways to save the state money.