Gov. Mike Easley Wants State Agencies To Reduce Budgets

RALEIGH, N.C. - Governor Mike Easley wants state agencies to reduce their budgets by two percent because of uncertainty over how the state’s slowing economy will affect tax revenues.

Easley budget adviser Dan Gerlach said Thursday the savings will be held in reserve by state government and could be returned if the economy improves.

The directive won’t apply to public education and the Medicaid system. Those two programs comprise half of the state’s 21 billion-dollar budget. The General Assembly’s chief economist recently said tax collections fell short between 60 million dollars and 70 million dollars of what lawmakers budgeted this year.

Slow revenue growth had been expected during the first few months of the fiscal year that began July 1. Gerlach said Easley wanted the government to be prepared should things turn more sour.