Gov. Mike Easley told state agencies Wednesday to draw up additional spending cuts because North Carolina's economy is expected to worsen and he wants potential plans in place for his successor.
In a memo to all state departments and other institutions, Easley ordered them to develop proposals on how they could reduce spending by 3 percent, 5 percent and 7 percent. The plans should be turned in by Jan. 14 --four days after Gov.-elect Beverly Perdue is to be sworn in.
The governor already has held back up to 5 percent of agency budgets as state revenues have fallen more than $300 million short of projected levels so far this fiscal year. The Easley administration has a plan to hold up to $1.2 billion in money to cover the shortfall.
Easley said North Carolina's unemployment rate is expected to rise this month after more than 500,000 jobs were lost nationally in November. The withholding taxes collected from employees are a key barometer of the state's revenue picture.
"Reducing agency expenditures will be an essential component of providing a balanced budget to Gov.-elect Perdue and the General Assembly," Easley wrote in the memo.
Easley told agencies to find potential reductions that would minimize effects on direct services to citizens. Eliminating duplicative and underperforming programs are encouraged, according to the memo.
The Department of Transportation announced last week it had laid off 88 temporary workers and likely will remove hundreds more from the payroll by the end of the year due to sagging road-building revenues.
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