NC's budget shortfall on the rise?

RALEIGH For a while, state officials have been tossing around the number $3 billion for a budget shortfall.

However now officials say that number is a conservative estimate.

According to the head of the state fiscal research division, in next year's budget the state won't have $1.6 billion in stimulus money, $1.3 billion dollars in state tax revenue and about $300 million in adjustments.

"Just those items alone total $3.2 billion in terms of availability that was used to put this year's budget together that won't be there to start the new biennium," Barry Boardman said. "There's still looming fiscal problems ahead."

The federal government kicks in $3 for every dollar spent as a state on Medicaid. Next year that goes down to $2. And secondary and post-secondary education is on the rise, which means more cost to the state.

And just maintaining current health benefits for state workers will cost an additional $572 million.

The state's pension fund was also underfunded earlier this year to help balance the books, but it can't stay that way without serious problems down the road.

All that means the budget shortfall will probably be closer to $4 billion.

"We've still got to get through another year before we can start thinking about improving fiscal condition," Boardman said.

However, a couple upsides to all of this is the report doesn't project any revenue growth for the state, so if the economy takes a turn for the better that gap will close somewhat.

In the meantime, Governor Bev Perdue says she does have a plan to get the state out of this mess. She says she'll unveil that plan in early November.

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