Search for Solutions

To reduce the deficit, legislators might be forced to cut into the budgets of several state agencies when they allocate funding for the next two years during the upcoming legislative session. New programs could be squeezed out of the budget altogether.

State officials said reducing the deficit will be a top agenda item when the legislature convenes one week from today.

In a statement released last week, Senate President Pro Tem Marc Basnight, D-Beaufort, stated that a deficit in the Medicaid program, caused by increased doctor visits and a higher demand for prescriptions, could account for $150 million to $185 million of the total shortfall.

Basnight also stated that the situation could improve or worsen as the year continues, but the budget will remain tight for several years.

"We are only halfway through the current fiscal year, so this picture could change either for the better or for the worse," the statement read. "But we know for sure that the state budget will be extremely tight not only for the rest of the fiscal year but also for the coming biennium."

Ruffin Poole, spokesman for Gov. Mike Easley, said he could not speculate whether Easley would target state agencies or programs to help reduce the deficit because Easley had not yet received budget requests from all state agencies.

"Once we get the final numbers we'll look around at the state government and see where we can save money ... and possibly get extra revenue for the shortfall," he said.

Rep. Leo Daughtry, R-Johnston, also did not specify which programs might be specifically targeted to help reduce the deficit. But Daughtry said the House will analyze spending to determine areas where money could be saved.

"The way to get through it is to rearrange our priorities and make government spending more efficient," he said.

Daughtry said recurring payments -- money that the state spends year after year on things such as teacher and faculty salaries -- are the greatest obstacle to streamlining costs.

But Daughtry said a tax increase is not a suitable way to deal with the deficit.

Basnight also stated that the N.C. government must attempt to be more efficient to decrease its current deficit.

"We will have to do what the average North Carolina family does in tough times," he said. "Tighten our belt, make do with less, clearly focus on our priorities, cut waste and inefficiency in government and make every penny count."

But some legislative aides think the shortfall might increase support for alternative methods of raising state revenue, including a historically controversial state lottery.

"I'm sure there will be a lottery bill introduced next session," said Danny Lineberry, spokesman for House Speaker Jim Black, D-Mecklenburg. "Whether the shortfall will help it to gain popularity remains to be seen."

The State & National Editor can be reached at stntdesk@unc.edu.