Perdue: School spending to go up by $350M

Most state agencies are expected to see deep spending cuts in Perdue's proposed budget, which she said she would submit to state lawmakers on Tuesday.

Perdue told members of the education policy advisory group that her budget will focus on job creation and retention and on education.

"If your bailiwick is not involved in one of those priorities, there are only bad times ahead for you in the budget, for the most part," she said.

Backing up the pledge to increase per-student spending that she made last week in her State of the State address, Perdue said schools statewide would get an extra $350 million in her budget proposal.

Still, the state Department of Public Instruction and administrative positions in local school districts would see cuts under her proposal.

Perdue also proposed last week spending $17 million on community college and vocation education programs for worker training and another $62 million for infrastructure projects and targeted industries to create jobs.

Perdue said Monday that the community college system would also see cuts at multi-campus sites and off-campus centers. While the University of North Carolina system would take some hits, she said her proposed budget fully funds need-based financial assistance and enrollments.

"In this most challenging economic environment, I actually hope we've been able to do a little bit of good for all three (public education) systems and to mitigate the losses," she said.

The state budget is $2.2 billion in the hole for the 2008-09 year, which ends in June, according to the latest projections. Fiscal analysts say the deficit could reach $3.4 billion in the fiscal year that starts in July.

Perdue has ordered state agencies to reduce spending this year by 9 percent. She also tapped almost $800 million in the state's "rainy day" reserve fund and has used money from the lottery and other trust funds to create a $300 million emergency account to cover day-to-day expenses as needed.

State Budget Director Charles Perusse said last week that some state agencies could see cuts of up to 15 percent to help balance the budget. Lawmakers also have suggested raising taxes on cigarettes and alcohol to generate more revenue for the state and offset recession-related declines in sales, corporate and personal income tax collections.