North Carolina is $1 billion worse off than previously thought.
Gov. Beverly Perdue is expected to announce this morning that the state has a $3.3 billion shortfall in the current fiscal year, according to legislative leaders.
As part of a remedy, she is expected to propose furloughs of state workers, an idea she had previously rejected.
Update: Perdue signed an executive order this morning implementing a flexible furlough program for state workers that will save $65 million this year.
All teachers' and state workers' compensation will be reduced by an annualized amount equivalent to 0.5 percent for the rest of the fiscal year. In exchange, they will receive 10 hours of flex time.
In addition, Perdue plans to capture more special funds, tap the state's reserves and use more federal recovery dollars to raise the $1 billion needed to close the budget gap.
She has also asked the legislature to pass a bill holding longevity pay, unused leave, service credit and health and retirement benefits harmless.
"North Carolina continues to experience the effects of a national economic crisis, which force me to make difficult decisions in order to maintain a balanced budget through June," she said in a statement.