The state’s new budget year began July 1, but Democratic leaders in the General Assembly were unable to agree on a final budget by then.

They kept government operating through a temporary spending bill. That bill was supposed to expire Wednesday, but when legislators couldn’t meet that deadline, they extended it again until the end of the month.

Under the temporary spending bill, each area of state government is allowed to spend money at a level equivalent to 84 percent of what was authorized for the past budget year.

To meet that requirement, agencies are taking all sorts of cost-cutting measures. Big things include not filling open positions. Small things include encouraging employees to use e-mail instead of printed paper to reduce the cost of office supplies.

And the uncertainty over what the final budget will look like is causing further problems.

Local school systems, for instance, don’t know how much money they will have to pay teachers in the rapidly approaching new school year. School officials also don’t know if the state budget will include an increase in average class sizes — a cost-saving measure that was included in budget proposals put forward by the N.C. Senate and N.C. House.

“Superintendents and principals are trying to hire teachers and fill positions, but they don’t know how many positions they’re going to have,” said Bill Harrison, the chairman of the State Board of Education. “Every one is doing their planning on a worst-case scenario until we get something definitive.”

In the court system, officials have suspended the rotation of Superior Court judges, who normally rotate among various counties every six months. To cut down on travel expenses, all judges have been ordered to remain in their home districts.

In a budget memo to judicial employees, the director of the N.C. Administrative Office of the Courts warned that if there is no permanent state budget in place by the end of the month, the department may not have enough money to pay out full salaries and other critical expenses.

Payments for witness fees, expert testimony and other expenses are already being delayed.

Similar delays affected the payment of some money in the N.C. Department of Health and Human Services, which held up some checks that pay for indigent patients in rest homes.

Lanier Cansler, the state’s secretary of health and human services, said that the checks were delayed four or five days because of “cash-flow issues,” but he said that the problem is now fixed.

The budget deadlock is especially hard on nonprofit groups that have contracts with the state to provide services and depend on state money, Cansler said.

“We’re having to hold those funds back,” he said. “That obviously creates a good bit of turmoil for those organizations.”

As everyone waits for a final budget, the legislators in charge of passing it appear to have made little progress on the key stumbling block: how to raise about $1 billion in new taxes.

Click here for the full article from the Winston-Salem Journal…