By Rose Hoban

In advance of the General Assembly reconvening in Raleigh next week, Governor Bev Perdue released her budget today, one that asks state legislators to increase the total state budget to $20.9 billion from the $19.7 billion allocated last year.

Under Perdue’s budget, many state agencies will take small cuts, with the exception of education, which the governor claimed is “one of the most important things state government can do.”

Perdue’s budget asks for an additional $562 million to keep or restore 11,000 education positions statewide. She asked legislators to restore education cuts in last years budget, and in addition, to give teachers a 1.8 percent salary increase (1.5 percent for administrators), the first increase in four years.

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Many other state departments had their budgets trimmed by one to two percent.

Perdue also vowed to restore funding for the NC School for the Deaf, the Eastern School for the Deaf, and the Governor Morehead School for the Blind.

To pay for education and her other priorities, the governor asked restoration of a three-quarter of a cent increase in the sales tax.

Republican leaders in the legislature have repeatedly said they are unwilling to increase any taxes.


Overall, health care spending in the governor’s budget accounts for more than 22 percent of the total general fund budget, or close to $4.6 billion.

Of that, Perdue is asking the General Assembly for at least $3 billion for Medicaid, the state and federally funded program for low-income, disabled, and elderly people. Perdue is asking for  a 3.7 percent ($109 million) Medicaid increase over last year’s budget.

State revenues after early estimates of income tax returns have shown a revenue surplus of $233 million, much of which will probably be used to close a current Medicaid budget gap of more than $150 million.

Rep. Nelson Dollar, (R-Cary) has said during public hearings this winter the General Assembly would address the Medicaid shortfall once the legislature reconvenes. Dollar is co-chair of the Health and Human Services Oversight Committee, which meets next Tuesday morning, the day before the General Assembly reconvenes for the short session.

Compensation for sterilization victims

Perdue’s budget includes $10 million for compensation for victims of the state’s now defunct eugenics program. For decades, North Carolina allowed for the forced and coerced sterilization of males and females who were poor, undereducated, institutionalized, sick or disabled. An estimated 7,600 people were sterilized under the program, which ended in 1974.

“This has been one of the most powerful issues I’ve ever learned about,” Perdue said. “They were absolutely victims, because they had health care providers, and educators and clergy, telling them that this sterilization was reversible and that they should do it.”

The allocation allows for a one-time, non-taxable payment of $50,000 for people who are confirmed as victims of the forced sterilization program. Members of the NC Justice for Sterilization Victims Foundation estimate about 2,000 victims could remain alive and able to claim compensation.

“The budget item is a sign, a symbol,” Perdue said. “All of the money in the world could not pay me back if I had been sterilized by my government. So, it’s just a small amount of money to fundamentally, visibly show that North Carolina made a mistake.”

Perdue’s budget also calls for the creation of a permanent exhibit about the program in the NC History Museum and a traveling exhibit that will be taken statewide.

Leaders on both sides of the aisle in the General Assembly have said they support compensation of eugenics victims.

Tobacco control

Until last year, tobacco cessation programs were paid for out of the Health and Wellness Trust Fund, a pool of money created from North Carolina’s share in the Tobacco Master Settlement Agreement negotiated with cigarette companies in 1998.

“The money was disappearing. Last year’s money was Health and Wellness money, and as you know the General Assembly stole the Health and Wellness fund,” Perdue said. She was chair of the Health and Wellness Trust Fund in her role as Lt. Governor under Gov. Mike Easley.

In last year’s budget, the General Assembly dismantled the Health and Wellness Trust Fund, making a one-time transfer of $32.9 million to the state Division of Public Health. That money included a one-time allocation of $17 million for tobacco cessation, particularly among young people.

Perdue called for a total of $10 million for this year’s budget.

Advocates for continued investment in tobacco control and prevention programs, said they were disappointed in the amount asked for by Perdue.

“We know things are tight, and that there’s not nearly enough money for everything,” said Peg O’Connell, a spokeswoman for the NC Alliance for Health, a coalition of dozens of health advocacy organizations. “We ‘re making our case to do the same thing as last year and allocate $17 million for tobacco prevention and control.”

“I am determined to … keep this initiative going, it’s critical that folks don’t start smoking, or using tobacco products,” Perdue said.

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Rose Hoban

Rose Hoban is the founder and editor of NC Health News, as well as being the state government reporter. Hoban has been a registered nurse since 1992, but transitioned to journalism after earning degrees...