BY FLORENCE GILKESON

Senior Writer

Gov. Beverly Perdue promised "just plain truth" without sugar-coating Thursday as she proposed sweeping changes in state government.

Speaking at a Moore County Chamber of Commerce luncheon at Pinehurst Resort, Perdue said she wants to consolidate agencies, eliminate positions, freeze hiring and privatize operations to streamline state government and save millions of dollars.

She said North Carolina must seize "a golden opportunity" to create a leaner, less bureaucratic government that will be nimbler and more customer-friendly.

"There will be lots of cuts and there may be blood in the streets, but we absolutely will not cripple education," she said during a press conference following the address hosted by the Moore County Chamber of Commerce.

Perdue said that later in the afternoon she would issue a freeze on all hiring of noncritical positions in cabinet agencies and would ask the Council of State and other agencies to follow suit.

She cited four areas for "reinvention" to achieve her goals of saving money and making government more efficient.

In addition to the freeze on hiring, they include consolidation of some departments and privatization of specified services, elimination of duplications and some "back-office functions," and a review of 150 boards and commissions with an eye toward reducing or eliminating those that are not essential.

"It's time to do this for the people of North Carolina," she said. "It's just good fundamental business sense. It's time to quit talking the talk and do something."

She said streamlining is essential if the state is to become competitive in the global economy, where workforce quality is a basic requirement. This will mean maintaining and upgrading the public schools, community colleges and the university system.

Perdue said her office is still working on the machinery to accomplish these goals and said the "excruciating details" would be found early in the new year when her proposed budget is presented.

"We are in tough times in this state," she said. "Our people are fighters. They are thinkers and innovators. I believe we have the will, the guts and the resolve to do whatever it takes to push this ahead."

Major Consolidation

Perdue proposed a sweeping restructuring that will reduce 14 high-level functions to eight.

If she succeeds, it will be the first time the state has undergone such a major reorganization in 30 years.

Among the changes proposed is merger of the departments of juvenile justice, correction and crime control and public safety into one Department of Public Safety. She wants to move the Employment Security Com-mission into the Department of Commerce to strengthen their focus stabilizing the economy, creating jobs and preparing the workforce.

Perdue also proposed a new name and a new focus for a department to become the Department of Management and Administration, consolidating the administration department with such agencies as personnel and controller.

She said the state could save money by closing 100 computer service units and entering into contracts with private entities. She suggested consolidation and privatization of many purchasing functions.

Acknowledging that it would not be easy, Perdue said she hopes for cooperation from the General Assembly in clearing the way to permit many of these changes. She said that many positions are constitutional, and it will take statutory authority to make such changes.

"I ask you to set the stage to make these changes," she said. "I didn't run for office to win a popularity contest."

In addition to the freeze on new hiring, she said that many agencies will need to justify their reason for existence and their number of employees.

Making Progress

Perdue opened her address with a review of the progress North Carolina has made in the past two years. That includes creation of 50,000 new jobs and $10.4 billion in economic investment.

She said that the unemployment rate recently declined almost 2 percent across the state, and North Carolina now leads the nation in job growth.

"Nationally, we are the best state to do business," she said.

Perdue also cited the state's new ethics and transparency laws and said the result means more open government.

Her three priorities were described as good schools, good jobs and a government that works. Perdue pointed out that community college is usually the first place where the unemployed go when they lose their jobs.

In a press conference after her presentation, Perdue refrained from estimating the savings expected from the restructuring or from estimating the number of jobs to be eliminated in the process of consolidating departments and cutting positions, many in the middle-management area.

"It will be decades before the state sees robust economic growth again," she said under questioning from news reporters.

Despite a looming $3.7 billion shortfall for the 2011 budget, Perdue said the budget balancing act should not be as critical as it was in 2009 when she literally did not have "money to pay the bills."

The St. Andrews Room at the Pinehurst Resort was filled to capacity for her address, billed as a major policy presentation.

Former Gov. James E. Holshouser Jr., who served from 1973-1977, state Sen. Harris Blake, state Rep. Jamie Boles, and municipal officials from Pinehurst, Southern Pines, Aberdeen, Carthage, Foxfire and other communities were among those in the audience.

Craven Hudson, Moore County Cooperative Exten-sion Service director, introduced Perdue, whom he knew when he was a 4-H agent in eastern North Carolina and she was the legislator representing his district. Hudson is Chamber vice chairman of community affairs.

Time Warner Cable co-sponsored the event, which was the fourth in a series of Chamber programs reviewing the condition of local, state and federal governments.

Contact Florence Gilkeson at florence@thepilot.com.