Cutbacks won't be limited to UNC

All state agencies will see their budget pies sliced during the 2005-06 fiscal year, with the biggest bite coming from education spending.

Public schools, community colleges and universities would split about $9.2 billion in funds, about $245 million less than their projected need, according to a preliminary decision by the N.C. General Assembly’s Senate Base Budget Committee.

Education is the major victim of the financial crisis because it takes up the biggest proportion of the budget, about 60 percent, said Sen. Jeanne Lucas, D-Durham, co-chairwoman of the education appropriations committee.

But all areas of the budget likely will be cut by equal percentages.

“Education is the main focus for the state of North Carolina,” she said. “If any budget cut would come, the largest cut would certainly come from education.”

Lucas projects that education will end up taking a hit greater than the $245 million recommended.

“We’re probably looking at more unless we find some more money,” she said. “It’s apparent that, right now, we haven’t found any more.”

Facing a debt of about $1.3 billion, the base budget committee decided to cut $500 million in spending and raise $500 million in new taxes, bringing the state $1 billion out of the red.

“We’re trying to help the state so we don’t have a budget crisis every year or every other year,” said Sen. Kay Hagan, D-Guilford, co-chairwoman of the base budget committee.

The method was successful the last time it was used in North Carolina, she added.

Transportation funds already are extremely low, but some of Gov. Mike Easley’s excess renovation projects can be cut, said Sen. R.C. Soles Jr., D-Brunswick, vice chairman of the transportation appropriations committee.

Health and human services, comprising about 25 percent of the budget, would likely see a huge cut as well, said Sen. William Purcell, D-Anson, co-chairman of the health services appropriations committee.

Like all other areas of the budget, health care will see an increased amount of funds, but not enough to cover its growth in costs since last year, Hagan said.

Spending targets for health care are recommended to be about $3.9 billion, or about $124 million more than last year.

But costs of Medicaid, the fastest-growing item on the state’s entire budget, are expected to rise more than $200 million, leaving the health care budget about $76 million short, Hagan said.

“The more we spend on health care, the less we have to spend on education, and Kay Hagan would not be happy with that at all.”

Contact the State & National Editor at stntdesk@unc.edu.