Charlotte Observer
June 22, 2003

N.C.'s GOP sees cuts as budget remedy
Eliminating vacant posts considered potential solution
MARK JOHNSON
Raleigh Bureau

RALEIGH - Republican lawmakers shake their heads as Democrats debate the best way to raise more money to balance the state's out-of-kilter budget. The answer, the Republicans contend, is on the other side of the accounting book: spend less. Legislators are facing a $300 million shortfall as they prepare a $15 billion budget for the next fiscal year, which begins July 1.

They suggest eliminating vacant jobs, merging worker-training programs or snatching some of the national tobacco lawsuit settlement money. Their proposals are not as simple as they seem and yield some unintended consequences, but at least some of the ideas have gained support outside the Republican ranks.

Here are how some of the spending reductions proposed by Senate Republicans break down:

CUT VACANT JOBS: 5,382 jobs funded through the state's general fund were vacant at the end of last year, which equal $231 million in salaries and benefits, according to the General Assembly's fiscal research staff. GOP senators propose cutting $200 million worth of those jobs.

The plan would leave as much as $31 million "in case there is an emergency," said Senate Republican Leader Patrick Ballantine. That remaining money could be used to fill vital positions.

For each of the past three years, when tax revenues have come up lower than projected, Gov. Mike Easley has made up the difference by asking state agencies to give back some of their annual budget. A big chunk of the funds the departments return is money that was budgeted to pay the salaries for vacant jobs.

"A lot of agencies are balancing their budgets with vacancies," said Scott Pattison, executive director of the National Association of State Budget Officers, who served as budget director for former Virginia Gov. Jim Gilmore, a Republican. States gain little from eliminating those jobs "if you've already captured the funding," he said.

Democrats emphasize that many of those positions, such as nurses at mental hospitals, provide critical functions that the state can't afford to permanently eliminate. At the end of March, the state had 5,210 vacant jobs.

More than one-fifth, 1,065, were prison guards or sergeants. The Department of Correction alone accounted for nearly 2,000 of the vacant jobs.

The Department of Health and Human services ranks second with 1,280 vacancies, which range from cooks and housekeepers to doctors and physical therapists.

CONSOLIDATE JOB TRAINING: North Carolina offers 48 separate work force training programs, vocational and other skill-building courses that help adults get jobs. The state helps fund 23 of the programs at a cost of $930 million, according to General Assembly staffers.

Administrative costs account for about $158 million, and Republicans suggest that at least those duties could be merged, saving an estimated $42.2 million.

Martin Lancaster, president of the state community college system and a former Democratic congressman, said the Republicans are on the right track.

The bulk of the job training programs are run by the state community college system, and Lancaster said some of the administrative duplication stems from requirements attached to the federal funding for many of the programs. "Significant savings," however, could be recouped if all of the work force training were put under the community colleges, Lancaster said.
The idea has been batted around for years, but other departments that provide job training -- and receive funding for it -- don't want to give it up, he said.

"All those agencies that have a piece of the pie want to keep their piece so no consolidation ever takes place," Lancaster said.

TOBACCO MONEY: The state's Golden Leaf Foundation receives money from the national tobacco settlement with cigarette makers. GOP senators proposed taking $269.3 million of that funding. Democrats responded that the foundation provides grants for scholarships, job training and incentives to attract new businesses, such as recruiting and retaining teachers in rural counties.

Sen. Tony Rand, a Democrat and Senate majority leader, said the fund is one of the few resources for economic development in low-wealth communities.

"To take our seed corn and prepare a Brunswick stew with it would be very short-sighted," Rand said.

Ballantine, a candidate for governor, and his fellow Republicans called Golden Leaf a "slush fund" in a proposal earlier this year, but he has since softened his stance.

"In the last couple months," he said, "I've been looking at some projects that the Golden Leaf is working on, and I think they're going in the right direction."

SCHOOL ADMINISTRATORS: Republicans propose lopping $3.1 million, or 10 percent, off the budget for the Department of Public Instruction, saying the department's Raleigh headquarters is top heavy and should put more money into teachers and classrooms instead of administrators.

Under the Republican mantra that government should run like a business, though, the department's numbers look conservative. The headquarters, where lawmakers sharply reduced staff in the mid-1990s, houses a staff of about 500 that oversees school systems with more than 100,000 employees.

That's one headquarters administrator for every 200 employees.

By contrast, N.C.-based Krispy Kreme Doughnuts, for example, has a headquarters staff of 400 that oversee 20,000 employees -- one headquarters administrator for every 50 employees.

CLASS-SIZE VS. ASSISTANTS: Republicans propose cutting the $25.3 million Easley sought for the latest installment in his program to reduce elementary school class sizes. GOP lawmakers would use that money to fund teacher assistants, funding that Democratic leaders in the Senate deleted from their budget proposal.

Republican leaders said teachers would rather have an assistant than a smaller class.

"What I think you're hearing from teachers is, `Well, I had 25 students and a teacher assistant,' " said Carolyn McKinney president of the N.C. Association of Educators, the state's largest teachers union. " `And now I have 22 students and no assistant, so what did I gain?' "

McKinney added that ideally, the teachers would like both the teacher assistants and smaller classes.

General Assembly leaders are scrambling to agree on a budget that both houses can pass by June 30, the end of the fiscal year, or lawmakers fear they will end up haggling into the fall.