Local state employees are facing a 0.5 percent reduction in pay for the remainder of the fiscal year, according to a press release from the office of Gov. Beverly Perdue.

Perdue signed Executive Order 11 this morning, an order that implements a flexible furlough program for all state employees. Each employee will receive 10 hours of flexible time off in exchange. The governor has also asked the General Assembly to pass legislation holding longevity pay, unused leave, service credit and health and retirement benefits harmless, according to the release.

The release says that Perdue is taking additional steps to ensure the state's budget is balanced on June 30. The move comes in response to an analysis by the Office of State Budget Management that indicates the budget shortfall for fiscal year 2008-09 will likely exceed $3 billion.

"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," said Perdue in the release. "I will do what I must in order to ensure that North Carolina can pay our bills and provide the essential services required by our citizens."