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Politics

So what's Gov. Perdue doing with lottery funds? Here are some answers

http://66.225.205.104/0317lottobudget.mp3

Today, Governor Perdue presented her $21 billion budget for next year. She's calling for a cigarette tax hike of $1 dollar a pack, and an additional 5 percent alcohol tax. Her budget also would eliminate 1,400 jobs and cut spending by $360 million.

"As families and businesses across our state are tightening our belts to make ends meet around the kitchen table, I believe that government must do the same. But in the process we cannot neglect or ignore the state's most pressing needs," Perdue says. 

Perdue says education is one of those pressing needs. She wants to increase the education budget next year by 2.5 percent. However, this year's budget shortfall is estimated at $2.3 billion. To help plug that gap, the governor wants to use lottery money and some corporate income tax funds bound for school construction. And that's been really controversial. WFAE's Julie Rose and Lisa Miller discuss the issue. Here's a transcript of their segment during Tuesday's All Things Considered:

Julie: Lisa, Perdue unveiled her budget today, but it's been two weeks since she first suggested using at least $88 million of Educational Lottery money to help make up the state's current deficit. We'll get to the particulars of her proposal in a minute, but first what's the reaction been to that piece of her plan?

Lisa: A poll released today by Public Policy Polling in Raleigh, which by the way is a Democratic pollster, says 63 percent of people say that money should be used for what it was intended - that's education. Local leaders across the state from both parties have expressed their opposition. It's also a matter of what authority do the local leaders have. They don't have too much. Mecklenburg County is considering sending a letter to the governor outlining how withholding those funds is going to hurt the county. County Commission Chairwoman says she wants the state to know just how much the county depends on that money.

"Any cut to money for capital construction will have an impact on services. Some of the areas where people will start seeing that impact will be places like our libraries and our recreation centers," Roberts says.

Lisa: So far the county is out $5 million dollars and if the state decides to withhold the total sum it could be at least double that.

Julie: Now what exactly has the governor done with the lottery money and what is she going to do?  

Lisa: $50 million of that has already been redirected to the state. And that portion of it was from the lottery's reserve fund. This is money that wasn't bound for school construction, but went towards operating the lottery itself. This is still controversial because any money that isn't invested in the lottery is supposed to go toward schools. Which is why of course it's called the Educational Lottery. What she's also done is withhold $43 million from counties in February. This money comes from the Public School building fund that's made up of mostly of lottery money and then some corporate income tax funds. In addition, the governor could withhold another $57 million from that building fund. Again, that's money mostly provided by the lottery.

The question now is will the state go ahead and spend that money-and officials aren't sure. The state's Budget Director Charlie Perusse was asked about this today and gave a very generic, non-committal answer.

"The governor asked that my office work with public instruction and NC County Commissioners Association to ensure that none of the existing capital projects would be stopped or hampered; we also didn't want to disproportionately harm the poor counties," Perusse said.

Julie: Now, Lisa, all this is all just for shoring up this year's budget. What about next year? Is there a chance Perdue will re-direct lottery money again?

Lisa: She says she's not. In her budget presentation today, Perdue said it's not going to happen. But you can bet many politicians are skeptical of that claim. During her campaign Perdue often said she wanted to make sure profits from the lottery were spent solely on Education, but it's clear when times are tight she sees some flexibility there.

Julie: Lisa, Thank you very much.

Lisa: Thank you.