North Carolina's Governor, Bev Perdue, gave her second State of the State address to legislators last night.
The Governor did her best to be optimistic, despite the specter of an enormous projected billion-dollar budget shortfall looming in the background. While she praised tough decisions that have already been made to cut costs, Governor Perdue said difficult choices will be required to keep the state in the black. Jessica Jones reports from the state capitol.
Dressed in a cherry-red suit, the governor began her address by teasing lawmakers about having to stay at work so late on Valentine's Day.
"I've been told all day that many of you in this room have been blaming me for destroying your Valentine's Day for your significant other, or whomever it might be. Now I've got some news for you, the speech doesn't last all night, I'm sure you can find some flowers or candy or a good restaurant somewhere tonight."
But it didn't take long for Governor Perdue to get down to business. As she looked out over a sea of lawmakers and onlookers, Perdue said she plans to deliver a budget plan later this week that would save 2 point 2 billion dollars by consolidating fourteen state agencies into eight.
"That privatizes some services, that continues the hiring freeze that halted pay raises in all but critical job areas. And we're going to offer an early retirement package in this budget to those who qualify, shedding as many as a thousand workers."
Perdue said although the state has already done more with less, that trend has to continue. The governor then paid dutiful tribute to a number of small and large businesses that have chosen to relocate or expand in the state. Republican leaders in the legislature passed Senate Bill 13 want to dip into business incentive funds to ease budget woes. But Perdue told legislators it's important to keep growing jobs despite the slow economy.
" Businesses look at more than the bottom line. But the bottom line is the difference maker in a company's decision to relocate. So in this budget, we will continue to fund our business incentives for job growth and job recruitment and I'm asking the General Assembly to lower the corporate tax rate to 4.9 percent."
The state's corporate tax rate is currently 6.9 percent, the highest in the Southeast. The governor then touted the virtues of education and pledged not to cut teachers' jobs. She also announced a new scholarship program she called the Career and College Promise.
"Any high school junior who signs up at school for the career and college promise who meets certain criteria while maintaining high academic standards will be eligible to earn a two year college degree at no cost."
Perdue didn't say how many students the scholarship might reach. After Perdue finished her address, Republican Senate President Pro Tem Phil Berger responded by saying solving the projected billion dollar budget shortfall should take precedence over everything else.
"That's still a huge hole for us to get out of. And so I don't think we can talk too much about new programs and new initiatives until we address the very real problem that we've got, that is to pay for the thing that we've already promised to."
Republicans say Senate Bill 13 would ease future budget concerns by using pots of money the governor already has at her disposal. Berger said the best kind of economic stimulus is one that allows people and businesses to keep their own money. Speaker of the House Thom Tillis followed up by saying there are a number of things Republicans are optimistic about.
"We're happy to see revenues coming in above what was forecast, we're happy to see the governor's open to bipartisanship that could begin by accepting senate bill 13 and accelerating savings from that so we're encouraged to hear that that the governor wants to work with us and there's already something headed to her desk."
But it's not clear how long Tillis' optimism will last. The governor has hinted she may veto that bill.