The state's revenues dropped $286 million or 14.3 percent in January compared to the same period last year.

The news was released Monday in a report by state Controller David McCoy.

"Revenue growth is slowing dramatically," McCoy said in a news release. "This decline was expected, and the state's financial plan was adjusted, but we are continuing to feel the strain of budget pressures." 

According to McCoy's report, personal income tax collections accounted for the nearly all of the loss in revenue for the month. McCoy also reported that investment earnings declined by $16 million, or 89 percent. State spending is down by 1.7 percent. Education and health and human services spending, the largest category of state expenditures, was 5.6 percent higher in January.

Perhaps a reflection of all this bad news, sales and use taxes, alcohol and tobacco taxes grew by $42 million or 8.5 percent in January 2009.

David McCoy will be the next state controller for North Carolina.

The House voted 113-0 Thursday to confirm McCoy's nomination, the final major hurdle before McCoy can assume the office. The Senate voted 44-0 in favor of confirmation in May, David Ingram reports.

The 200-person controller's office is considered among the most important in state government. It is responsible for keeping the state's books, handling payroll for 90,000 state employees, managing cash flow and describing the state's fiscal health to Wall Street bond raters.

The job of state controller carries a seven-year term, making it largely independent of legislators and the governor, and a salary this year of $153,319, or about $14,000 more than the governor's salary.

McCoy has served as Gov. Mike Easley's chief budget officer since 2001, and Easley nominated him to be controller in April. McCoy will be the fifth person to hold the job since legislators created it in 1986.

Legislators weighed McCoy's qualifications, which are different from those of his predecessors. He is a lawyer and has master's degrees in education and public health, not in business or finance. But there was no debate in the House Thursday.

The term of outgoing controller Robert Powell had been scheduled to expire July 1.

Gov. Mike Easley's budget director, David McCoy, is a step closer to becoming state controller after the Senate Commerce committee endorsed his nomination this morning.

The full Senate and House must confirm the appointment, reports Lynn Bonner.

In his long government career, McCoy has held posts as varied as state transportation secretary and deputy secretary in the Department of Administration.

Franklin Freeman, a top advisor to Easley, credited McCoy for his accomplishments as head of the state budget office.

Freeman said McCoy "helped guide this state through the worst fiscal crisis since the Depression."

Turns out the number of state Department of Transportation employees who were shortchanged on their pay today is larger than officials first thought.

State Controller Robert L. Powell says that 407 employees missed out on a total of $288,954, Pat Stith reports.

To make up for that checks will be delivered this afternoon to employees who work in the Raleigh area, he said. Checks for other employees will be delivered Saturday to a DOT facility where they can pick them up.

That's faster than depositing the money directly in their bank accounts, Powell said.

He said the underpayments, totaling a week's pay for many of the employees, was due to a human error made while the payroll system was being "tweaked" to fix something else.

Powell, whose agency is responsible for the payroll, said he would apologize to the employees who were not paid in full on time.

"It's a new system," he said. "It just happened. We're fixing it."

Several hundred employees of the state Department of Transportation weren't inadvertently short changed today.

"It looks like about 250 people only got half of their check," State Controller Robert L. Powell said.  "Right now we're trying to identify what happened, why it happened, and we're preparing  another payroll today to make those people whole."

Powell's agency operates the new "Beacon" payroll system. Pat Stith reports. He said there had been relatively few glitches since it was installed at the DOT last December and gradually extended to other state agencies.

Powell thought today's problem was an anomaly.

"I don't really know know why it happened," he said.  "What I do know is we're going to make those people whole today."