Perdue vetoes state budget; lawmakers plan for override

The House and Senate last week passed a $20.2 billion spending plan for the 2012-13 fiscal year, which starts Monday. The plan includes a 1.2 percent raise for teachers and other state workers, caps the state gas tax, fills a shortfall in Medicaid funding and includes some funds to help offset the loss of federal stimulus money for schools.

Perdue said, however, that the budget doesn't include enough money for schools and that Republican legislative leaders have repeatedly rebuffed her efforts to negotiate a compromise.

"We need a budget that moves North Carolina forward and is focused on investing in our future," she said during a Friday morning news conference. "The budget passed last week fails that test."

The governor said she met last week with House Speaker Thom Tillis and Senate President Pro Tem Phil Berger to see if they would be willing to shift some money around to boost education spending.

"I didn't ask the leaders to meet me halfway. ... I asked that they do a little bit better," she said. "They said to me, 'Take it or leave it.'"

The current plan leaves schools with $190 million less in the coming year than this year, she said, noting that it spends nearly twice that amount on a tax break for large businesses.

"I simply don't believe as a citizen that the General Assembly should give tax breaks to equity partners in law firms, to lobbyists and other wealthy business owners while they leave the needs of our classrooms and our state unmet," she said.

Perdue said she became more hopeful for a budget deal on Thursday, when the General Assembly's fiscal staff reported that the state had collected $117 million above projections in the past three months.

Lawmakers said the collections resulted from businesses failing to take advantage of a new tax credit and didn't reflect an actual uptick in revenue. So, they had no plans to spend it, fearing that it would create a hole in the 2013-14 budget that they would have to fill.

Faced with a legislature unwilling to budge on its budget, Perdue said she has no choice but to veto it, noting that it also falls short in money for job creation and hiring probation officers and includes no compensation for victims of the state's forced sterilization program.

"The budget fails to do an adequate job in what is now and what has always been North Carolina's top priority as a people – preparing our children so they can have more opportunities than any of us ... have ever had," she said.

Superintendent of Public Instruction June Atkinson and House Minority Leader Joe Hackney both supported the veto, saying public schools need more money from the budget.

"If we are going to increase our graduation rate from its current all-time high and prepare all students for college and a career, the budget for public education must be stronger," Atkinson said in a statement.

“Gov. Perdue has always stood up for education, and we are happy to stand with her on her veto of the proposed budget," Hackney said.

"Superintendents across North Carolina are waiting for a final budget before they make critical spending decisions for the coming school year. That is why it is imperative that lawmakers work together in the coming days to quickly come up with a budget that does more for our public schools, students and the state," Bill Harrison, chairman of the State Board of Education, said in a statement.

Perdue vetoed the 2011-12 budget a year ago, but lawmakers voted to override the veto and enact their spending plan.

Tillis said lawmakers plan to adjourn for the year and go home Tuesday, and a budget rewrite isn't likely in two short days. Instead, he said, Republicans will try to override her veto again.

Six House Democrats voted for the budget, but they might not vote for the override.

"We're conferring with all those members to see if they would actually stick with us," Tillis said. "If they don't, one would have to argue that that's a purely political decision as well because they've gone on record as supporting this budget and I'd have to ask what's changed."

He and Berger dismissed what they called Perdue's "apocalyptic language" about the budget, noting that the difference between their budget and what the governor is seeking is a fraction of 1 percent of the total budget.

Because this is the second year of a two-year budget cycle, the General Assembly doesn't have to attempt an override. If lawmakers leave Raleigh without taking up the budget veto, spending in the coming months will revert to the levels approved last year, which would mean deeper spending cuts for schools and state agencies and no raises for workers.

"That's not good for North Carolina," Tillis said. "That's not good for kids. It's not good for Medicaid recipients. It's not good for state employees and certainly not good for teachers."