Governor Takes City Revenues to Balance State Budget Coalition Chairman Mayor McCrory Schedules Emergency Conference Call Thursday, Feb 7 - 3:00pm – 3:30pm, – call in number (919) 733-2511 At a press conference yesterday in Raleigh, Governor Easley declared a State of Fiscal Emergency. Acting under this authority the Governor will reduce spending for the remainder of the state's fiscal year, including a freeze on the payment for the Local Government Reimbursement for the inventory tax, the municipal franchise and natural gas tax and beer and wine excise payment. Citing a projected revenue drop of 3% from last year (in a budget that was based on 4% revenue growth) the Governor is preparing for a shortfall of approximately $1 billion in this year's state budget. This action by the Governor reduces state municipal revenues by $130 milllion at time when demands on local revenues are increasing. Cities face continued responsibility on the frontline in the nation's war on terrorism, spending millions on preventing and preparing for acts of terrorism – responding to calls, protecting government buildings, water supplies and businesses. The Governor's action reduces city revenue nearly eight months into the fiscal year – forcing cities to make difficult adjustments in their budgets when they can least afford to. This marks the second year that the Governor has declared a fiscal emergency – last year the inventory tax reimbursement was frozen, but eventually released after the conclusion of the year. Projections are that the reimbursement payments will not be made as the state will utilize these local funds to balance the current state budget. The Governor did leave the door open to releasing the municipal utility franchise tax, but that it would be at the end of the fiscal year, if at all. The cuts the Governor included in his announcement yesterday included: State Agency reversions (7%) - $ 356 million Municipal Utility Franchise (telecom & natural gas) & beer/wine excise - 114 million Local Govt Inventory Reimbursement 95 million State Facilities Repair & Renovations - 112 million Savings Reserve ("Rainy Day") - 313 million Highway Trust Fund - 81 million Clean Water Trust Fund - 21 million Coalition Chair, Mayor Pat McCrory of Charlotte has already talked with the Governor's Office. He has scheduled a conference call to discuss the situation with all Coalition members at 3:00PM Thursday, February 7. Mayor McCrory believes, "Coalition cities need to understand the situation better and work together during this difficult time. Balancing the state's budget on the backs of our cities doesn't serve any of us well – our cities, our state or our citizens." For more information, please contact : Beau Mills, Director NC Metropolitan Coalition www.ncmetros.org