FOR IMMEDIATE RELEASE                                                                          June 24, 2008

REPUBLICANS OFFER ALTERNATIVE SPENDING PLAN

Spends Less, Education and Other State Obligations Met

Senate Republican leader Phil Berger (R-Rockingham) and House Republican Leader Paul Stam (R-Wake) today suggested a budget plan for the 2008-2009 fiscal year; the proposal provides teacher and state employee pay increases identical to those included in budgets adopted by House and Senate Democrats.  Overall, the Republican plan would reduce the amount of spending outlined by Democrat Governor Mike Easley by $500 million, reduce House Democrat spending by $327 million, and spend $343 million less than Senate Democrats.

Democrat legislators are currently trying to resolve differences between Senate and House budgets passed earlier in the legislative Short Session.  Republican leaders said their idea would take the lower line item number from spending provisions approved by Democrats in either Senate or House passed budgets; significantly, the Republican outline costs taxpayers less than either Democrat passed budget. 

Republicans suggested that by proceeding in this fashion, agencies will receive funding at levels approved by Democrats in either the House or Senate, there would be money available to fund the full statutory amount for the state’s rainy day and repair and renovation funds, and money will be in place to pay for increased fuel costs for local school systems.  They also proposed that voters have an opportunity to weigh-in on whether the state should incur additional debt to construct prison facilities and university capital projects. 

Republican Leaders suggested that the $320 million surplus could be used in a number of ways:

• Carry money forward into the next fiscal year to cover any revenue shortfall
• Complete the phase out of transfers from the Highway Trust Fund ($147 million) so that additional money would be available for road needs
• Provide dollars for career technical and vocational education programs to address North Carolina’s dropout rate
• Provide incentive and merit pay for highly qualified teachers to work with students most in need of good teachers and in fields where there is a shortage of qualified teachers such as math, science and special education
• Fund some capital construction on a pay as you go basis and reduce the amount of debt proposed by Democrats

 Senate Republican Leader Phil Berger made the following statement:

 “Every year Democrats in the House and Senate pass separate spending plans; each plan differs in particular line items.  In some respects, the House spends more than the Senate and in others the House spends less.  Because of these differences, Budget conferees are appointed to put together a compromise bill.  Invariably when Democrat conferees get together to resolve differences, they opt for the line amount that spends the most, and the final bill ends up being more than either previous version.  We had a novel idea, why not take the lower number for most line items and just spend less?  That is what this proposal does, and it works.  The spending total for 2008-2009 is $21,022,942,287 which is $327 million less than the House plan, $343 million less than the Senate proposal, and over $500 million below the Governor’s suggested budget.

  “With the economy in trouble and the cost of living, especially the cost of food and transportation for working families, continuing to grow, now is the time for state government to tighten its belt and spend tax dollars prudently.  With this proposed budget plan, we can fund necessary state functions and reduce the probability that we will face a budget hole when we return after the first of the year.”

 House Republican Leader Paul Stam said:

 “The Democrats have in recent years included substantial borrowing through the issuance of Certificates of Participation.  Our suggestion is to bundle those projects into two bond proposals and let the voters decide whether they feel the state should borrow additional money.  It is, after all, their money we are talking about spending.”

A copy of the Republican proposed budget is available immediately upon request.

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