Text of Governor's Budget Message
'We have tightened the budget by $334 million'

Below is the text of Gov. Jim Hunt's May 17 remarks upon releasing his budget proposals for the coming fiscal year:
Today, I am presenting a budget to the General Assembly that keeps North Carolina's focus on what matters most -- our children and our schools.

This is a balanced budget that makes good on two of this administration's top priorities: fully funding Smart Start in all 100 counties, and raising teachers' standards while we raise their pay to the national average. These are important steps toward making our schools First in America by 2010.

It also makes important investments in our universities and our community colleges, and builds on the progress we've made in recent years to protect our environment, boosts economic opportunities and protects the funds we've dedicated to our hurricane recovery efforts.

For our children and families, we will expand Smart Start by $67 million starting October 1st. This will mean full funding in all 100 counties and next year's budget will make full funding permanent.

And I am asking legislators to expand North Carolina Health Choice, our children's health insurance, which will make an additional 65,000 children eligible for coverage.

For our schools, this budget provides the funds needed to raise teacher standards and to raise teacher salaries to the national average. It also includes money for ABCs of Public Education, which will provide resources and rewards to schools meeting or exceeding their expectations.

In addition to enrollment increases at universities and community colleges, we're taking steps to provide financial aid for needy, in-state students to offset the increasing cost of higher education. A recent task force study showed that at least 50 percent of university students request financial aid, and this will go a long way to helping those students.

I strongly support the higher education bond proposal that is moving through the General Assembly this week. It will help make long overdue repairs and upgrades that are critical to keeping our universities and community colleges strong. I will work closely with legislative, business, university and community college leaders to make sure that this referendum passes in November.

Just like any budget, we looked for ways to redirect resources to our top priorities. We have tightened the budget by $334 million, which is more than double our pledge to identify and redirect $150 million from the budget each of the last four years.

To repay the settlement on the state's intangibles tax, I am recommending that the legislature pass a judgment bond to fund this $240 million settlement obligation this year. We looked at every possible way to repay this money while keeping our commitments for children and for schools, and we will have the funds needed to pay back these bonds over the next five years.

And every agency is doing its part -- including Smart Start. Because of local partnership efforts affected by Hurricane Floyd, the delay in funding in 1998 and the additional time it takes new partnerships to develop services, I am recommending a one-time reduction of $49 million from Smart Start funds that cannot be spent in the next year.

To further our efforts to protect our natural resources, I am proposing $1.2 million for farmland preservation as a part of our Million Acres Initiative. The budget also seeks $1 million for inspectors to monitor stormwater and sedimentation pollution, and $5.2 million to boost mass transit efforts. I am also strongly supporting a proposed increase to $100 million over three years to the Clean Water Management Trust Fund.

For state employees, I am proposing a three percent salary increase, and there are funds in the current budget to help offset premium increases in health coverage for the next year.

We are also taking important steps to fight juvenile crime and to keep young people away from trouble, boost economic opportunities across the state, and make positive changes in the mental health system.

There's no question that this is a tough budget year and we had to make some tough decisions. But our economy is strong, and we have what we need to do this job. I look forward to working with the General Assembly and moving quickly to pass a budget that meets our commitment to our children and our schools.

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