Gov. Beverly Perdue said Tuesday she may have about $150 million less at her disposal from the federal stimulus package to close a $2 billion state budget shortfall this year.
Perdue identified the tentative amount as she announced former Health and Human Services Secretary Dempsey Benton would oversee how North Carolina's $6.1 billion share of the stimulus gets distributed.
"I'm going to have dig deeper," said Perdue. "I'm trying to find the least hurtful kind of cuts."
She already has asked state agencies to cut up to 7 percent from their spending plans this year and recommended reductions for her proposed budget for the next two years.
Last month, the governor projected she would use $934 million from the stimulus to close the shortfall for the fiscal year ending June 30, but that amount was based on the House version of the bill. Perdue had worried that the final compromise measure would give less flexibility to the state on how to spend its share.
With less money available, Perdue would have to find additional money elsewhere or order more spending cuts.
Perdue said her administration is still studying details of the federal stimulus plan, signed into law Tuesday by President Barack Obama, so the $150 million amount could change.
Much of the money through the stimulus to narrow this year's shortfall would come through the federal government paying a greater percentage of the overall expenses for Medicaid. North Carolina is projected to receive $2.35 billion for Medicaid in the package, but the money will be distributed through late 2011.
Fiscal analysts said lower sales and income taxes due to the recession already has state coffers taking in $625 million less than lawmakers projected through the first half of the fiscal year ending Dec. 31 to operate state government.
Estimates by budget officials for the shortfall range from $1.8 billion to $2.2 billion by the time the fiscal year ends June 30.
Perdue said she opened a new Office of Economic Recovery & Investment to ensure the state's share of the stimulus is used properly and get the money out quickly to create the most jobs. The state budget office already is so involved fashioning her spending proposal for state government that a separate stimulus agency was warranted, she said.
The White House has said the package would save or create 105,000 North Carolina jobs in the next two years.
"We feel very hopeful that North Carolina is ready to go," Perdue told reporters. "My goal is to have folks working very quickly."
Leading the new office will be Benton, a former Raleigh city manager, state chief deputy of the state environment department and Health and Human Services secretary for the last 18 months of Gov. Mike Easley's administration.
Perdue said Benton is qualified to ensure the state meets federal regulatory requirements to prove the money is being spent properly.
"He brings the best overall skill set because he's been a manager so he understands meeting the demands of the bureaucracy and getting projects out very quickly," Perdue said. "He understands the problems, if you will, the challenges of working with the state of North Carolina."
Perdue said Benton's job is temporary, probably lasting no more than 18 months and will include hiring of staffers. Benton, 63, said he was urged by Perdue to come back to state government to take another high-profile position after his stint as HHS secretary.
"I have tried to be a good steward of the public's investments," he said. "I hope to be able to contribute to the prudent and effective use of these resources."
Also Tuesday, Transportation Secretary Gene Conti said that North Carolina received $838 million through the federal stimulus for transportation projects — $735 million for highway and bridge projects and the rest for other transit such as public transportation and rail.
DOT said it wants to let construction contracts by June for the first half of its federal money for bridges and highways.