Gov. Beverly Perdue says the steep drop in revenue made it hard to keep a campaign promise to help seniors.

Perdue was responding to questions posed by readers of The Charlotte Observer. Two readers asked her about a plan Perdue touted during her campaign to expand the homestead exemption and freeze property tax evaluations for seniors who make less than $50,000 and have lived in their homes for 20 years.

Perdue said the recession and a steep deficit made such a promise difficult to keep.

North Carolina faced a shortfall of $4.7 billion — a 20 percent hole in the state budget — for this fiscal year. Even with new revenue and federal recovery funds, we cut $2.1 billion from the state budget. As a result, many tough decisions had to be made to balance the budget and to protect public school classrooms and other core services in health and public safety.

I'm hopeful that as the economy rebounds we'll be able to make progress on many issues this budget could not address.

Republicans have said Democrats overstated the size of the deficit by measuring available revenue against what they would have hoped to spend in the best of times instead of what was actually spent in the previous year.

The Senate approved Thursday a bill designed to keep people with high debts from losing their homes.

The bill would double the state's homestead exemption, which protects property from being taken by certain creditors, such as credit card companies. The bill raises the exemption for individuals from $18,500 to $36,000 and for married couples from $37,000 to $60,000.

The exemption applies to judgements arising from unsecured debts such as credit card bills. In secured debts, such as a second mortgage, the borrower agreed to put his or her home up as collateral.  

Sen. Dan Blue, a Raleigh Democrat sponsored the bill earlier this session when he was in the House and is now pushing it in the Senate. His original idea was to raise the exemption to as much as $300,000 but knocked the number down after negotiating with interest groups.

The exemption does not allow anyone to avoid paying a debt. It just makes it tougher to put people on the street. The bill fits in with other laws the state has adopted meant to curb predatory lending.

"You still owe the debt," Blue said. "This is consistent with what we've been trying to do in protecting homeowners."

House budget writers saved a tax break in the proposed $21.4 billion state budget for fully disabled military veterans, but it will cost the counties.

The property tax homestead exemption for the veterans has an $8.6 million price tag. House leaders wanted to pay for it in the state budget, but Rep. Paul Luebke, a Durham Democrat, said Senate leaders did not go along, reports Dan Kane.

"The only way we could get that program is if we spread it around to the various counties," Luebke said.

House Minority Whip Bill McGee, a Forsyth County Republican, noticed the cost shift in the budget proposal. He pointed it out on the House floor during Monday's budget debate, but he did not criticize the move.