The governor plans to spend more money on students next year, while scaling back on spending elsewhere. But she didn't give specifics.
"Let me be clear about where I stand, education is the engine that propels North Carolina's future," Perdue said. "It cannot --and will not-- be sacrificed. And yes, even in these tough times, we will increase per-pupil spending in our public schools.
"With a $3 billion plus shortfall, we have to be upfront and make hard, painful decisions," Perdue said. "Truth in budgeting, time is here, now today."
She says she'll be turning to Washington for help.
"We must go after every federal recovery dollar that is available," she said. "We need to get that money into North Carolina and put our people back to work by."
By building bridges, improving roads and expanding infrastructure, Perdue says that will create jobs and save jobs.
That work will be done with transparency Perdue promised. She says a zero tolerance policy will help keep any problem state employees from putting lives at risk and help restore faith in government.
After Perdue's speech, republicans in the legislature responded saying they are a little disappointed that the governor didn't give specifics about how she'll turn around the state during this tough economy.
They also question whether spending more money on education is the right thing to do.
Senate Republican Leader Phil Berger of Rockingham County gave the GOP response.
"Every time what we hear from them is spend more dollars on education," Sen. Phil Berger said."The reality is that extra dollars don't necessarily improve education. In fact if you look back at what we've spent on education and where we are today, I don't think that you can say that we've achieved great things for our families or our students."
Republicans say hundreds of millions of dollars could be saved if class sizes were slightly increased.
When it comes to the tough economy GOP leaders also point out that democratic leaders were the ones who increased the budget by nearly 50 percent over the past 6 years.