NC General Assembly Adjourns In Tough Budget Year

EMERY P. DALESIO

RALEIGH, N.C. (AP) — The North Carolina General Assembly closed Tuesday after more than six months of work dominated by the recession, a tight state budget and tax increases.

Lawmakers spent most of their energy balancing service cuts against tax increases in one of the worst recessions in generations. The tough economic times didn't stop lawmakers from banning cigarette smoke from restaurants and bars, extending tax breaks to Apple Inc. and other businesses promising to create jobs, and bailing out the state-funded health insurance plan for its employees, retirees and teachers.

The Legislature agreed last week on this year's state budget after rising unemployment, bankruptcies and struggling businesses caused the worst year-to-year decline in tax collections since at least 1970. The eventual $19 billion spending plan included about $2 billion in cuts, more than $1 billion in federal stimulus money, and nearly $1 billion in higher taxes and fees. More than 700 state workers were slated to lose their jobs.

Democrats who run the House and Senate said the taxes forestalled deeper cuts to education, social services and public health. More than half of North Carolina's annual budget is spent on education, from public school kindergarten through the university system.