State revenue continues to fall.

Through November, tax collections are down 6.1 percent, according to a report released by the legislature's Fiscal Research Division. Through October, revenue was down 5 percent. Budget forecasters say it's too early to know how deep the hole will be.

The report, prepared by Barry Boardman, an economist with the Fiscal Research Division, states that through November, total general fund revenue is $520 million below a projected $7.2 billion.

Boardman's report also seeks to put the current recession in context.

In fiscal year 1982, a national recession led to a drop of 9.2 percent in the state's revenue. In fiscal year 1991, a national recession cut the state's revenue by 8.1 percent and in 2001, a recession led to an 8.8 percent drop in the state.

The state's current budget is $21.5 billion.

Boardman cites weak housing markets, tight credit and job cuts as some of the causes for the revenue loss.

When lawmakers and the governor write a state budget, they'll have to cope with a revenue shortfall and increased costs.

The report states that the state Health Plan will need $200 million to $300 million and that medicaid costs and college enrollment are expected to rise, as they often do when the economy is down.

Correction: A previous version of the post misstated the report's description of tax collections and total general fund revenue. It also mistated the projected revenue to date.

Another name has surfaced for the Cabinet.

Raleigh insiders say Gov.-elect Beverly Perdue will name Linda S. Millsaps secretary of the N.C. Department of Revenue, a key behind the scenes position that keeps tabs on state taxes.

Millsaps currently works as assistant secretary in charge of tax administration. She previously worked in the General Assembly's Fiscal Research Division, the former home of another Perdue pick, legislative liaison Andy Willis.

Earlier this month, Secretary Reginald Hinton said that he would step down on Dec. 31. 

Andy Willis may be Gov.-elect Beverly Perdue's legislative liaison.

Currently the vice president for government relations for the University of North Carolina system, Willis' name surfaced this week as a likely pick to lobby the legislature for Perdue.

Willis has a lot of experience at the legislature.

From 1996 to 2003, he was a senior budget analyst with the Fiscal Research Division of the General Assembly, serving as the primary staffer for the powerful Senate Appropriations Committee.

Perdue chaired that committee from 1995 to 2000.

For three years afterward, he worked a an assistant to the chancellor of N.C. State University. He's been at the UNC system for the past three years.

He has an undergraduate degree from N.C. State and a master's of public administration from UNC-Chapel Hill.

State revenues are down 5 percent through October.

According to a report released Friday afternoon by the legislature's Fiscal Research Division, state revenues are $320 million below the $6.3 billion target set through October. It's still too early to say what next year's budget deficit will look like, but most signs say it will be big.

"We've really got some weaknesses in our economy-based taxes and when you look forward that weakness is not going to turn around soon," said Barry Boardman, an economist with the division.

The revenue shortfall could reach $1.6 billion, said Rep. Mickey Michaux, a Durham Democrat and a key budget writer in the House. Lawmakers are going to have to make serious and deep cuts, he said. The good news, Michaux said, is that the budget can be balanced without raising taxes.

"We're going to have to do a lot of things that are going to be sort of hurtful," Michaux said.

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State lawmakers may have a fatter budget surplus than they originally thought, though it remains far less than in previous years.

Economic analysts with the state legislature's Fiscal Research Division now estimate that lawmakers will have a budget surplus of about $150 million for the new fiscal year that begins July 1, Dan Kane reports.

Last month, the budget surplus estimate had dropped to as low as $15 million as economists feared the slowing economy was leading to a significant drop in tax collections.

But the new report released today indicates that April's income tax collections exceeded expectations, giving lawmakers more room to breathe as they fashion a state budget that is expected to reach $21 billion.

"April revenues came in ahead of target and year-to-date collections are now $90 million ahead of forecast," said the report.

The report said that the housing recession, rising energy prices and the free-falling financial sector are the main drains on the state and national economy. "They are taking a toll on consumer spending," the report said. "It will be well into 2009 until the effects of these shocks have dissipated."

Barry Boardman, an economist on the legislative staff, said conservative estimates for economic growth have helped keep North Carolina from ending up with a budget deficit for this year. The report indicates that fiscal staff have revised their economic growth expectations further downward for the 2008-09 fiscal year from 4.7 percent to 3.5 percent.

In the past two years, budget surpluses had been as high as $2 billion.

The state's tax collections are decreasing, a sign that an economic slowdown is hitting North Carolina.

Revenues are running slightly — about 1.25 percent — ahead of projections, according to a Feb. 13 report from the Fiscal Research Division, a nonpartisan staff for the legislature. But tax revenues are slowing. The state has $140 million more than it anticipated at this point, the report states, because officials expected a slowdown and were conservative with projections.

State Rep. Jim Crawford, a chairman of the House Appropriations Committee said that what little "extra" money there is won't go far in a state budget that exceeds $20 billion.

"It can go in a heartbeat if the economy turns down," Crawford said. "We're absolutely dependent on the economy from here on in."

For example, the state must still come up with $100 million to pay for teacher bonuses at the end of the school year, said Crawford, a Granville County Democrat. Crawford said the state budget can likely withstand the economic slowdown, but legislators may have some work to do when the session begins in May.

"I don't think we're going to be in trouble, but I think we're going to have to tighten our belts a little bit," Crawford said.