Governor's Panel, House Democratic Caucus

Governor's Panel, House Democratic Caucus

Gov. Perdue's Prepared Remarks

First let me say thank you for passing S-CHIP - it was the right thing for America's children. Thank You Congressman Clyburn. And to the rest of the House Democratic Caucus we appreciate what you've done regarding the stimulus package. All of us governors - Paterson, Ritter, and Strickland urge a quick conference and resolution with the Senate.

We are grateful that this Democratic Caucus recognizes the importance of hearing from governors. Today, as we talk, the nation's governors are in the trenches, working to keep state services intact and our citizens on the job.

In North Carolina and across America, we need to get our people back to work. So I am not going to waste a moment of your time and get to the point. Push the Senate to pass the stimulus package, conference quickly and come to consensus:
· Without delay.
· With as few restrictions as possible, and
· Do not delay distribution of the funds. We must put that money, and our people, to work NOW.

You know the need. As in many other states, North Carolina's unemployment rate has soared in 12 months from 4.9% to 8.7%. Total unemployment has increased from 185,000 in the last year to nearly 400,000. The unemployed are in all of your districts.

I know it's in every corner of North Carolina - 97 of our 100 counties reported increased unemployment last month.

After globalization, we in North Carolina have worked hard to diversify our economy. Our efforts during the last decade have helped broaden our manufacturing-based economy away from its reliance on textiles, furniture and tobacco.

The dramatic expansion of the financial services, high tech, biotech and pharmaceuticals sectors have helped, somewhat, to cushion the blows our workers have faced. But the ill economic winds blowing over our nation are sparing none of us.

In Charlotte, one of the nation's leading financial centers, the shakeup in the banking industry has tens of thousands of workers on edge. They are uncertain about the financial stability of their families.

In the Research Triangle of Raleigh and Durham, high-knowledge and high-tech workers worry whether the next paycheck might be their last.

Still, people find our state an attractive place to raise a family and retire. Our population continues to grow—3 million more people in the next 20 years, and we will double the number of retirees - all this means new schools, more teachers, better roads, increased health needs and other necessary services.

I have already been to Washington and appreciate the warm welcome and concern of North Carolina's congressional delegation. And none of us governors are expecting Washington to send us a magic bullet and end this. But we are extremely hopeful for a new strong partnership between Congress and the states.

Across America, governors are at work. In North Carolina we ARE taking action.

We didn't wait on the federal stimulus. In North Carolina we fast-tracked borrowing to speed work, starting now on $744-million worth of shovel-ready projects in our universities, prisons, ports, and other areas. That will provide work for 26,000 workers and also position us for recovery as well.

We balance our budget every year. But because of the recession and falling tax revenues, North Carolina is anticipating a $2 Billion-plus shortfall in our current budget that ends June 30th and at least $2.5 billion next year, about 12-15% percent of our operating expenses.

And that's based on current estimates of how bad it is in my state. But yesterday I learned corporate income tax returns are down 50% -- so I cannot begin to predict what may happen if the national economy continues to soften.

I, along with my fellow governors, am making the tough choices every day, examining every penny we spend to make sure all spending is absolutely necessary and in many cases making significant cuts.

I have been Governor for 4 weeks. All my cabinet secretaries and Council of State members during that time have submitted potential budget reductions of up to 7%.

I and other governors are doing all we can to balance the budget and be responsible. But during these unprecedented times we can't do it alone - we really need Washington.

A substantial federal package will give states the opportunity to get people back to work, and it will also keep kids in the classroom, prisons open, and seniors getting care.

We are ABSOLUTELY ready to go - we are shovel ready - we are ready to put people back to work now.

Our Department of Transportation has identified more than $5 Billion in work that is shovel ready and we have $1.5 Billion in wastewater and clean water projects ready to go yesterday.

With congressional action to provide us additional support for Medicaid, states will be better positioned to deliver vital health care services.

Today, North Carolina pays 36% for Medicaid expenses. Every additional 1% the federal government provides means up to $100 million in state funds that can used elsewhere to address our shortfall.

Also, we need your help in conference to make sure that the new and innovative State Fiscal Stabilization Fund in your bill can work for all states.

In North Carolina we have protected education. We increased K-12 and higher ed almost $200 million in this year's budget, which was balanced when we passed it, before the economy went over the cliff. We need your help in conference to make sure this helps us to continue to make progress, and not penalize us for historically protecting education.

I WILL make the tough and hard decisions on North Carolina's budget. I WILL balance the budget and do it responsibly. Governors do not expect Washington to make our jobs easier.

But we do ask and expect your active help in this extraordinary time to make sure that the stimulus efforts you enact are not offset and undermined by cuts states must make to balance our books. And we urge you to provide us with the flexibility to drill down and address the critical needs of our citizens.

The reality of this global recession is that we need, urge and anticipate this to be a partnership that will put America's and North Carolina's people to work.

Thank you.

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