With a high unemployment rate and a declining economy, North Carolina's superior Triple-A bond rating could be in jeopardy.
By Matt Viser
City, State & National Editor
The budget clock is ticking louder by the second as legislators continue meeting this week in an effort to find ways to clear up a bleak revenue picture.
Most discussions have dealt with how much money can be generated and which sources of revenue will be used. Loophole closings, income-tax and sales-tax increases have all been on the table for discussion among N.C. House and Senate conference committee members.
Legislators realized earlier this week that the projected revenue growth they were using was too high. Originally, budget writers in both the House and the Senate estimated an overall revenue growth of 5.3 percent over the next year. But they realized this estimate was too generous, given a poor economy and high unemployment rate.
"As the economy has turned sour, we found our spending exceeded our revenue," said Rep. Warren Oldham, D-Forsyth, co-chairman of the House Conferees. The revenue growth projections have been scaled down to 4 percent. The decrease means $167 million less for budget writers to use.
Several adjustments will have to be made to make up for this change in revenue. "We've got to make more cuts or increase revenue," said Paul Luebke, D-Durham.
It appears as if a tax increase of some sort will be inevitable.