The shortfall for the next budget year is projected to be around $2.7 billion. Governor Beverly Perdue and Republican lawmakers have said big cuts and employee layoffs are likely.
In a news conference Tuesday, the State Employees Association of North Carolina - or SEANC - said it's interested in alternatives such as expanding the tax base and eliminating what it calls corporate tax loopholes.
SEANC Executive Director Dana Cope asked Governor Perdue and lawmakers not to make state employees bear the entire burden of reducing the budget.
"We're trying to bring North Carolina out of this economic crisis that we face, and in order to do that, you shouldn't add anybody - I don't care who they are or where they work - no one should be added to the unemployment" Cope offered.
Cope said the union has found ways to cut $10 billion from the budget without layoffs.
Here's SEANC's list:
- Mandated combined tax reporting $375m
- End special corporate tax breaks - $34m
- Return Golden Leaf Fund money to general fund - $570m
- Eliminate the One NC Fund - $52m
- Recoup capital reserve on non-profit hospitals - $4.5b
- Consolidate state funded health care and draw down federal funds - $1b
- Cap state health plan reimbursement rates - $375m
- Consent to have state health plan member medical charges audited - $21m
- End payments for hospital mistakes - $13m
- Eliminate health coverage for lawmakers - $723k
- Terminate secret Blue Cross contract for the state health plan - "untold million(s)"
- Extend temporary taxes from 2009 - $1.3b
- Increase cigarette tax - $454m
- Modernize franchised company tax structure -$200m
- Maximize access to federal Medicaid dollars - "untold million(s)"
- Create 4-day, 10-hour state work week - $600m
- Create voluntary furlough program - $250m
- Video conference inmate court appearances - $5m
- Sell unused equipment and planes - $56m
- Create one source for inmate prescription info - $3m
- Stop double paying on mowing and new road signs - $10m
- Privatize the state ABC liquor system - $800m
- Create moratorium on private contractors and consultants - $100m
- Increase court fees - $75m
- Use state owned office space more efficiently - $20m
- Modernize state E-procurement system - $10m
- Charge nominal admission at state museums - $4.5m
SEANC represents some 55,000 North Carolina state employees.
In her State of the State speech Monday night, Democratic Gov. Beverly Perdue told the Republican-controlled Legislature she would push to protect teacher positions, recruit more companies to the state, and rework state government as the General Assembly works to close the budget hole.
Perdue tried to draw a line with legislative leaders while offering some room for cooperation, even though their relationship has been rocky early in this year's session and could lead to a veto.
"Hear me now: I will not back down from those priorities," Perdue said. "I will not play partisan politics, and I will reach across the aisle day after day to find compromise. I will sacrifice some of my goals if it means protecting our children's education and growing new jobs for our people and this state."
Perdue gave some snippets about the two-year state government spending proposal she's expected to roll out later this week. She said she would "fund every current state-supported teacher and teaching assistant position." She also wants to revive a 2008 gubernatorial campaign pledge to offer high school students with good grades a free two-year college degree.
She gave few details about what she intends to cut to close a projected budget gap. She talked up a previously announced government reorganization that would narrow 14 departments and offices into eight Cabinet-level departments. She also said she'd offer an early retirement package that could eliminate 1,000 positions.
The new Republican leaders were pleased when she said she wants to lower the corporate income tax rate from 6.9 percent to 4.9 percent, which would be the lowest marginal rate in the Southeast.
But GOP lawmakers wanted more budget details from her and wondered aloud how she could pay for this and the other programs without extending a pair of temporary taxes approved in 2009 by Democrats to close that year's gap. The GOP is committed to letting the higher sales and income taxes expire, said Senate leader Phil Berger, R-Rockingham, who delivered the official Republican response to Perdue's speech. Perdue didn't discuss those taxes, which would generate another $1.3 billion if left in place.
"I'm concerned about some of the promises that were made," Berger said. "I think that's one of the ways we've gotten into the mess that we're in now, by promising to do things and not having the money to pay for them."
Republicans said unemployment still hovers nears 10 percent in North Carolina, and Berger blamed "inefficient, irresponsible" policies by Perdue and Democrats and high tax rates for part of the economic problems.
While everyone knows somebody who is unemployed, Perdue said the state is doing better than it was two years ago. She said businesses have pledged to create 58,000 jobs and are investing $12.5 billion in the state.
"Two years ago we stood at the precipice of economic disaster," Perdue told the legislators in the speech. "We squared up and put the bat to our shoulder, and swung hard. And two years later, North Carolina is winning this game."