The state will experience a $1 billion economic deficit next year unless taxes are raised or programs cut drastically, Gov. Jim Martin said Tuesday.
That comes on top of an announcement by state budget officials that the current budget has a projected shortfall of $261.4 million.Martin made his assessment at a meeting of the state Advisory Budget Commission.
``You've got to eliminate a lot of things before we're going to begin to address a billion-dollar problem.' Martin said. ``It's going to take a great deal of courage on both sides of that equation, either to raise taxes or to cut programs.'
For North Carolina residents, the continuing budget crisis means state government services will continue to scrape by on bare-boned budgets this year.
And next year, it means taxpayers will see even deeper cuts in current services or a tax increase combined with hikes in fees to attend everything from museums to colleges.
``Even to meet the necessities, there's not enough money,' Martin told members of the commission.
``Therefore, you're going to have to look at whether we start to go back into the budget and cut out some programs that are already being offered - programs that are attractive, meaningful and beneficial and highly desired ... but which you or I or other members of the General Assembly may decide are not important enough and not necessary enough to justify an even bigger tax increase.'
The commission is made up of top legislative leaders and others picked by the governor to help him prepare and deal with the state budget.
The deficit for the current fiscal year - running from July 1990 through June 1991 - means that:
$100 million must be cut from the $7.25 billion operating budget for general government services ranging from public schools to prisons and colleges.
$60 million must be cut from the $207.3 million budget for construction projects, which include $3.3 million for renovation of the Stone Economics Building at the University of North Carolina at Greensboro; $491,900 for renovation of Anderson Building at Winston-Salem State University; $131,338 for the N.C. A&T State University library; $7.5 million for the school of business and the school of social work at the University of North Carolina at Chapel Hill.
Martin will ask the General Assembly, when it convenes on Jan. 30, 1991, to allow him to spend $101.4 million that was set aside last year as an emergency fund to provide money if the economy faltered.
Martin presented the commission with a list of 21 ``items for consideration' to help toward balancing the 1991-1992 budget.
One item called for the state to provide administrative aid to only one school district per county. That would mean the state would provide financial aid for only one of the three school districts in Guilford County, one of the two districts in Randolph County, one of the two districts in Alamance County and one of the four districts in Rockingham County.
Local taxpayers would have to make up the difference.
Martin refused to say which he favors or opposes.
Two other items on the list are 20 percent increases in tuition for students in community colleges and those at campuses of the University of North Carolina.
In-state students at UNCG and UNC-CH now pay $644.50 for tuition. That would increase $128 to $772.50. Out-of-state tuition would increase from $5,189 to $6,227. At N.C. A&T, the in-state tuition would rise from $561.50 to $674. Out-of-state tuition would rise from $4,975 to $5,970.
State Sen. Ken Royall, D-Durham and Senate Appropriations Committee Chairman, suggested keeping the amount of money distributed to each state agency at the current level - allowing only for additional spending when state or federal law requires it.
Royall's suggestion, according to Marvin Dorman, Martin's deputy budget director, would cost an additional $415.3 million in the next fiscal year.
Among the required additional spending items are: $78.6 million for Medicaid; $38.5 million for increasing enrollment in public schools; $38.9 million to operate new and expanded state prisons; and $17.2 million to replace school buses more than 14 years old.