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Budget surplus little more than a memory

by Kirk Ross

Nightmare on Jones Street

Halloween – the scary part, not the candy – may come a bit early this year as state agencies in the midst of preparing their budgets get wind of the fiscal picture for next year.

With all the focus on the elections, it’s a little understandable to forget that it’s also crystal ball season for economic forecasters. In a couple of weeks the state will send out growth and revenue projections – the first glimpse of what lies ahead when a newly minted General Assembly returns next January.

We already know not to expect another $2 billion surplus and the word you hear most often right now about fiscal 2007-08 is “tight.”

While this year started out solid, with revenues well over projections in July, an economic slowdown is pretty evident in the numbers floating around right now. After a big dip in the spring, unemployment in the state has crept back up to 4.8 percent, tracking the national average. The winding down of textiles and furniture manufacturing is mainly to blame. You can see that in the Hickory-Lenoir-Morganton region, where the unemployment rate hit 6.4 percent last month. The pain is spread around, too. Unemployment in Rocky Mount in July was 7.1 percent. Add to this a predicted slowdown in the housing sector, which buoys the Triangle, Triad and Charlotte through retail sales and construction jobs. August stats are out next week. Boo.

So what would a less than rosy revenue forecast mean for next year’s budget? Plenty. Because on the other side of the equation, there’s a lot to pay for.

Top of the list is an IOU to Judge Howard Manning, who is sending steady signals that the reckoning over education equity is nigh.

Manning’s isn’t the only legal ruling that’ll be hitting up the public till. Last week Superior Court Judge Joseph John ruled that Article V of the state constitution (“Finance”) was pretty clear in saying that everyone, even the governor, had to keep their danged hands off the state pension funds. The ruling could mean the state will have to accelerate repayments of the millions borrowed in 2001 and toss in some interest to boot.

New Day Dawning

Last week in Chapel Hill, UNC system counsel Leslie Winner slow-walked members of the UNC Board of Governors through the new ethics and lobbying reform rules and all the various exclusions and exceptions packed into the new rules. There were new terms to learn, as well, like “reportable dinner.”

Then things got deadly serious as Winner explained to board members, three-dozen of the most well-connected folks in the state, that they could no longer be a conduit for sports tickets. They’ll still get theirs, but no more handing out freebies to the gang. What’s more, Winner said, the decision had been made to start the rule with the winter sports season. Translation: basketball.

After the shock wore off, BOG member Peaches Gunter Blank piped up with the obvious. “That’s going to free up a lot of ACC tickets.” Emphasis on a lot.

We salute the sacrifice.

Roseman writes a check

Speaking of the BOG, member Al Roseman, recently selected by New Hanover Republicans to run against Democratic incumbent Sen. Julia Boseman, settled any doubts he was serious about the election by loaning himself $100,000. The State GOP added $50,000 to that and the money race at least tightened up quick. Roseman now has about $200,000 on hand. As of Boseman’s last filing, she has $164,000 at the ready. Neither of the two must feel anywhere near as comfortable as New Hanover Republican Rep. Danny McCombs, who has managed to raise around $138,000 even though he’s running unopposed.

Film at 11

Sen. Walter Dalton (D-Rutherford) lost his campaign manager after his opponent, Wes Westmorland, says she misidentified herself as a reporter for the Garner-Webb student newspaper while filming a Westmorland rally. McKenzie Thompson apologized to Dalton and resigned last week saying the incident was a “miscommunication.” Then, since she was no longer one of us, she blamed the media. Dalton, who noted Thompson had been recommended by the state party, accepted the resignation adding that he hoped to move beyond the distraction. Way beyond.

Shaving off some votes

If the Dems make strides in Western North Carolina expect some credit to go out to the folks in the Democratic Party’s Western Task Force who are behind the 400 or so Burma-Shave style signs that have gone up in 30 western counties. They’re designed to re-brand the Democratic Party with themes ranging from environmental stewardship to gas prices to the high cost of health care. Here’s an example of some of the roadside couplets:

The high price of gas

Greatly impacts us

But Big Oil’s politicos

Still avoid taxes

Kirk Ross travels the state for CapeFearMercury.com and writes about state governance at ExileOnJonesStreet.com. He can be reached at editor@capefearmercury.com.

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