Gov. Beverly Perdue's seizure of the rainy day funds raised eyebrows.

Perdue announced last night that she was taking the $787 million in state reserves to pay the state's bills, including $250 million for the State Health Plan.

A bill in the state Senate would have put that money in the health plan anyway, and Senate leader Marc Basnight said he told Perdue last week to tap the reserves. Gov. Mike Easley similarly seized the reserves in 2001.

But House Speaker Joe Hackney and House Majority Leader Hugh Holliman questioned the constitutionality of the governor's move at a time when the legislature is in session. 

"You know, we're not potted plants here," Hackney said. (WUNC)

And Elaine Mejia, an analyst with the N.C. Budget and Tax Center, said the move was troubling because Perdue had previously said she might use the rainy day fund to address budget problems next year. 

"The truth is this is a very bad sign," she said. (N&O)

Reps. Paul Luebke and Ty Harrell support $483 million coming into the state's economy.

That figure was the centerpiece of a news conference the Democrats held Tuesday to express their support for the Employee Free Choice Act, also known as the card check bill.

Luebke and Harrell said in what is sure to be a polarizing claim that if 5 percent more of the state's workers were in unions, they would earn $483 million more in wages, assuming that union workers make eight percent. Those workers would then have more money to spend in the economy.

"We are always happy to have more people working and working at higher wages," said Luebke, of Durham.

The estimates on new wages come from a study by the Center for American Progress Action Fund. The center is a liberal think tank that supports the card check bill.

With Gov. Beverly Perdue and the legislature facing a deepening budget chasm, a large coalition of groups has formed to try to minimize the size of the budget cuts.

At least 61 groups, including organizations representing teachers, state employees, organized labor, African-Americans, retirees, and children’s advocates have joined forces to lobby for a "balanced approach" to the budget crisis that includes both budget cuts and tax increases, Rob Christensen reports.

"It is simply impossible to cut our way out of the budget crisis," said Bob Jackson, executive director of the state AARP, senior organization, at a news conference at the Marbles Museum in downtown Raleigh. "We can't cut our way out of this mess and if we try it will actually make our long-term problems worse."

The coalition, Together North Carolina, delivered letters to the legislature, governor, lieutenant governor and Cabinet secretaries. The group plans to lobby throughout the legislative session.

Elaine Mejia, an analyst with the N.C. Budget and Tax Center, said that even with help of the federal budget stimulus passed by Congress, the state could be looking at 10 percent budget cuts.

More after the jump.

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* Historians unveil lengthy account of the original Isaac Hunter's Tavern, a dive bar that accidentally contributed to Raleigh being named state capital. (HT: Laura)

* The N.C. Department of Transportation will spend $38.6 million in the Charlotte area, comapred to $64 million in Eastern North Carolina. Mayor Pat McCrory is upset.

* The N.C. Budget and Tax Center, a liberal group, projects that the budget shortfall in 2009-2010 could be as high as $4.6 billion, or $3 billion after federal help.

* The N.C. Young Democrats will push for a smoking ban in restaurants, anti-school violence legislation and renewable energy tax credits today at the legislature.

A progressive group is hoping to land the first punch in the budget fight.

The N.C. Budget and Tax Center issued a report today arguing that spending has actually decreased in North Carolina since the start of the 1999 fiscal year.

With the state facing a budget shortfall that Gov.-elect Beverly Perdue says could be as large as $3 billion, legislators will soon begin considering spending cuts.

But the Budget and Tax Center report says that per capita spending has dropped $19 per person since 1999 when adjusted for inflation.

"North Carolina's population has grown by an estimated 1.3 million people, or 17 percent since 2000," writes Meg Gray Wiehe, the report's author. "However, state spending has not kept up with population growth over the past decade."

The report also finds that the proportion of general fund appropriations to the state's total personal income has also decreased, from 7 percent in 1999 to 6.7 percent this year.

Rob Schofield, policy director of the liberal N.C. Policy Watch think tank, said that his group will push for comprehensive reforms, such as broadening the sales tax to include services, rather than simply across the board spending cuts.

"We'll be making the point that this is a revenue crisis and not a spending crisis," he said.