| Legislative
Bulletin |
February
2, 2001 |
 |
Here
is the text of Gov. Mike Easley's letter to state agencies
detailing spending cuts he is imposing to help close a $500
million budget gap:
January 23, 2001
To: Department Heads and Chief Fiscal Officers
From: Gov. Michael F. Easley
Subject: Managing the current year budget deficit
The Office of State Budget, Planning and Management recently
has provided me with a detailed briefing of the 2000-2001
fiscal year budget situation, which reveals that the current
budget deficit now exceeds $500 million. The analysis of
December 2000 General Fund collections indicates that for the
sixth consecutive month the state has failed to reach its
budgeted revenue targets. OSBPM has been working to identify
ways to balance this deficit and has identified measures to
minimize the impact of expenditure control measures to program
services. However, it is evident that more stringent
expenditure restrictions are necessary, and these measures
require the assistance of both managers and employees
throughout state government.
While this budget deficit is not attributed in total to
the recent cooling off of the economy, it has reached a level
of severity that necessitates immediate and extensive measures
to maintain a balanced budget as required under Article III,
Section 5(3) of the North Carolina Constitution. Accordingly,
I am directing that the following actions be implemented by
OSBPM, in conjunction with state agencies and institutions, to
insure that expenditures remain within anticipated revenues
for the current fiscal year:
1. In November 2000, OSBPM advised agencies of reversion
targets generally established at an amount equal its last
five-year average reversion (excluding 1999-2000) plus an
additional one percent of its current authorized General Fund
appropriation. Based on current revenue collection data, it is
necessary to increase these reversion targets for state
agencies. While some agency targets may vary due to unique
spending patters, the general targeted reversion is now the
average reversion for the last five years plus two percent of
the current authorized General Fund appropriation. I have
directed OSBPM to be prepared to revise current allotments or
to restrict fourth-quarter allotments in order that agencies
hold all spending to these targeted levels. Your OSBPM analyst
will advise you of your new reversion target and provide you
with any assistance you may need in managing this effort.
2. Effective Jan. 24, 2001, and until further notice,
vacant positions in the executive branch of state government,
with the exception of those for which prior commitments have
been made, may not be filled except as specifically approved
by the department head as an exception to this directive.
Reversion targets for state agencies will not be modified as a
result of any such exceptions granted by department heads
under this directive. In applying this directive, agencies may
make exceptions for: vacant positions exempt under section G.S.
126-5(d) from the State Personnel act; emergency situations;
positions critical to law enforcement and public safety; and
positions related to the custody and care of persons for whom
the state is responsible. Specific guidelines for
administration of this directive are attached.
3. Effective Jan. 24, 2001, no purchase orders will be issued
for goods or services which will require the expenditure of
General Fund appropriations, or other funds which will revert
if unexpended, except as specifically approved by the
department head as an exception to this directive. Reversion
targets for state agencies will not be modified as a result of
any such exceptions granted by department heads under this
directive. This directive applies only to the executive branch
of state government. Purchase orders which have been signed
prior to this date on behalf of a state agency but have not
been executed by the provider are not included in this
directive.
4. Effective Jan. 24, 2001, department heads of the executive
branch of state government are instructed to evaluate
employees' travel and to limit travel to the maximum extent
feasible to instances involving public safety, public health,
emergency situations, or the custody or care of persons for
whom the state is responsible
5. Effective immediately, all General Fund
appropriations for capital improvements unencumbered as of
Jan. 24, 2001, are placed on hold. This includes direct
appropriations as well as allocations from the Reserve for
Repairs and Renovations for facilities of agencies in the
executive branch of state government. This directive does not
apply to allocations from the Reserve for Repairs and
Renovations for institutions in the University of North
Carolina.
6. Department heads of all state agencies and institutions are
directed to evaluate programs and processes currently in place
to identify immediate and permanent efficiencies which can be
implemented to reduce the cost of state government.
The Office of State Budget, Planning and Management is
available to provide guidelines and assistance to you and your
respective staffs as we work together to move North Carolina
forward to resolve this critical situation. Please be assured
that where it is consistent with meeting the challenge of a
balanced budget for fiscal year 2000-2001, every effort will
be made to accommodate agency-specific circumstances.
Thank you for your immediate attention and cooperation in this
matter.
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