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North Carolina's pension system for state and local government employees is about to get a fresh examination.

A 13-member commission, appointed by State Treasurer Janet Cowell, will hold its first meeting in January to evaluate what changes need to be made in the system that serves 820,000 North Carolina including teachers, state employees, firefighters, police officers and other public workers, Rob Christensen reports.

Cowell appointed members of the Future of Retirement Study Commission in December. The commission was created in October by the boards of trustees of the Teachers' and State Employees' Retirement System and the Local Governmental Employees' Retirement System. The chairman is Robert Clark, a professor of management and economics at N.C. State University who specializes in aging and labor economics and pension and retirement policies.

Cowell said said the current pension system was designed in 1963 and had not been significantly changed since then. Pension systems across the country have drawn attention during the recession as funding levels have dropped and many private sector employee have been forced to delay retirement.

The first meeting will be held 9 a.m. January 25 in the Dawson Conference Room of the Albermarle Building.

Committee members include Sen. Richard Stevens of Cary; Rep. Deborah Ross of Raleigh; Charles Abernathy, county manager for McDowell County; Mary Bethel, co-director for AARP North Carolina; Randy Byrd, criminal investigations supervisor for the Cary police; Joseph Coletti, a fiscal analyst for the John Locke Foundation; Monda Griggs, a curriculum specialist for high schools; Darleen Johns, a Raleigh business woman; Charles Johnson, vice president of the State Employees Association of North Carolina; Shirley Morrison, human resources officer for Guilford County School; Aaron Noble, human resources director for the City of Burlington and Charles Perusse, state budget director.

VOTE HAUNTS: Nearly two weeks after U.S. Rep. Larry Kissell bucked his party and voted against health care legislation, Democrats in his district are seething. The talk is that Kissell may face a serious primary challenge. (Charlotte Observer)

PORTRAIT PLEASES: Rene Dickerson was nervous as he prepared to unveil his portrait of the late U.S. Sen. Jesse Helms. The cloth over the painting dropped, and the room gasped. The crowd broke into long applause. (N&O)

RESERVES AMPLE: North Carolina state government has at least $620 million at its disposal so far to close any budget hole this fiscal year, the state's budget director says. So far, revenue is down $95 million, a fraction of the multi-billion dollar shortfall faced last year. (AP)

Gov. Beverly Perdue said the early news on the April 15 tax returns is that the state revenue picture is better than expected.

After being briefed this morning by budget director Charles Perusse, Perdue said she was told that sales tax revenues for the last quarter are "fairly good" or "not as bad as it could have been," Rob Christensen reports.

But the governor said the tax returns have not yet been fully calculated so it is difficult to get the full picture.

"I believe by Friday I will have a handle on the numbers and by Tuesday or Wednesday we can give you the numbers," Perdue told reporters after speaking to a luncheon of the state chapter of the National Federation of Independent Businesses at the Raleigh Marriott City Center.

The state is facing a $2 billion budget shortfall for the fiscal year ending June 30th and a $3 billion to $4 billion shortfall for the year beginning July 1.

The governor said she was confident the state could pay its bills and meet its payroll.

Taxpayers who have to write a check to the state tend to wait until the very last day.

And the roster of procrastinating taxpayers includes folks who owe six figures or more, said state Budget Director Charlie Perusse.

"Folks who are required to pay final payments for the prior tax year, especially large income tax payers, hold onto their money as long as possible," Perusse said.

It's human nature to wait to write that check to the state. There's also a financial incentive — the money draws interest if a taxpayer hangs onto it.

All those checks getting mailed on the deadline is part of the reason why April numbers are a big deal for those writing the state budget. Perusse said the revenue department is still processing tax returns and it's too early to know whether the state's $3 billion budget deficit will grow or shrink.

In past years, the state has collected more than $1 billion in April. Officials have been pleasantly surprised in past years when the April numbers were even better than expected.

"Obviously the surprise could go either way," Perusse said.

Gov. Beverly Perdue would cut prison spending, but keep the same number of beds.

At a presentation this morning, Budget Director Charlie Perusse said that proposed cuts would mainly be in closing older, less efficient prisons.

He singled out McCain Correctional Hospital, a minimum custody health care center for adult male inmates that was built in 1908.

"Is it worth putting repair and renovation money into facilities that are 80 or 90 years old?" he said. "It's going to cost more to repair them ... then to transition (prisoners) to a new site somewhere else."

He said that the per-day costs at older prisons are often much greater than at newer facilities. Recent prison designs in Pamlico, Nash and Warren counties have also allowed for double-celling of inmates. 

Perusse said that the state would still have the number of beds projected to be needed by the state Sentencing Commission projections.

Gov. Beverly Perdue will present her budget tomorrow.

Perdue will hold a press conference at 11:30 a.m. to discuss her plans for state spending over the next two years.

After her remarks and a question-and-answer period, Budget Director Charlie Perusse will also answer questions from the press.

Dome will be following the budget unveiling on Twitter with the hash tag #ncbudget and live-blogging the event here.

Gov. Beverly Perdue will likely recommend huge cuts this week.

Her budget office has suggested scenarios that call for cutting from $1.3 billion to $2 billion from the state's $21 billion budget, or 10 to 15 percent at most state agencies.

Today, Perdue has scheduled a speech about her education initiatives. She has already pledged to increase per-pupil spending at public schools, which will likely be paid for with money from the federal stimulus package.

On Tuesday, Perdue will release her proposed budget. The state Senate will consider it first, then the House will make modifications.

"The decisions the governor is having to make are some of the toughest that have been made, really, in the last 80 years," Budget Director Charlie Perusse said. (N&O)

Major budget cuts are on the way. 

Gov. Beverly Perdue will propose significant cuts in public services next week, as she faces the biggest drop in tax revenue in recent memory, her chief budget advisor said Wednesday.

"The decisions the governor has to make are some the toughest that have had to be made in the last 80 years," said Charlie Perusse, her budget director said at a briefing for the news media, Rob Christensen reports.

There was no hint of how Perdue will balance the budget — whether agencies or programs will be eliminated, prisons closed, state employees laid off, or taxes raised.

"She has charged my office to look line by line at the agency's budget to focus on protecting core services: education, health care, public safety," Perusse said. "There are going to be substantial reductions in our budget."

Perusse said the governor had asked his office to make "strategic cuts," not just across the board reductions, looking whether the taxpayers were benefiting from the program.

Perdue's recommendations are scheduled to be made Tuesday. But aides said she will make a speech Monday outlining her some of recommendations on education.

In her State of the State speech to a joint session of the legislature Monday night, Perdue said she would increase per pupil spending in the public schools.

The good news? The economy may rebound by 2010.

The bad news? State government won't get more tax revenue then.

During a half-hour presentation on the state's economic situation, Gov. Beverly Perdue's budget director, Charlie Perusse, said that the state will likely end this year with a $2.2 billion shortfall.

That would be 10.6 percent below the amount the state budgeted, or 5.9 percent less than it received in the last fiscal year. That would be the largest year-to-year drop in state revenue in the records available, which date to the 1970s.

In the first eight months of the year, the state already has seen revenue drop by $1.2 billion. The second billion is projected through the next four months, in part because April and June are normally big tax-collection months.

Perusse said that the economy would rebound by early next year, but tax collections will lag behind, likely staying flat in next year's budget.

"Employment and the market will stabilize, but it will take six months to a year for revenue collections to actually catch up," he said.

Gov. Beverly Perdue appointed Charles Perusse state budget director.

Perusse has 15 years' experience in state budget and financial management. He served as deputy state budget officer from 2002 to 2008 and was appointed acting budget director in September.

Previously, he worked eight years as a fiscal analyst for the legislature's Fiscal Research Division and spent three years as budget coordinator for the N.C. House of Representatives.

"During this time of revenue shortfalls and impending budget cuts, Mr. Perusse's expertise will be a tremendous asset to my office, to our state agencies and to the people of North Carolina," Perdue said in a statement.

With North Carolina facing a budget gap that could be as high as $3 billion, the state budget director will have a tough task ahead.