RALEIGH, N.C. — State lawmakers have taken a break for the holiday weekend, but the battle over the budget won't rest.

The debate over taxes and cuts still hasn't produced a final compromise. Both the House and the Senate are still far apart on how to raise $1 billion in new revenue for the new fiscal year to help lessen the severity of state budget cuts resulting from a projected $4.6 billion deficit.

One of the sticking points is a provision that subsidizes college recruiting.

The provision, which passed quietly four years ago, allows out-of-state scholarship athletes to be charged the less-expensive in-state tuition. Universities cover the in-state costs, typically through booster club and endowment funds.

The statute costs the state about $11 million in lost revenue last year and drives the debate over tax money priorities during tough budget times.

"We're laying off teachers and cutting programs that are critical for the needs of the citizens of this state," said Rep. Pricey Harrison, D-Guilford. "It's very difficult to justify."

Harrison said North Carolina cannot afford to charge the lesser in-state tuition to out-of-state scholarship candidates. Dropping the provision could save nearly $14 million next fiscal year.

But Senate Majority Leader Tony Rand, D-Cumberland says the program helps the University of North Carolina system expand its pool of both academic and athletic scholarships.

"You want to get the best scholars you can get, and I would argue to you that you want to get the best athletes you can get," Rand said.

Others argue that taxpayers should not be forced to subsidize what booster clubs and endowments are already meant to fund.

Rand said the provision doesn't just subsidize high-dollar men's sports. Women's athletics benefit from the in-state provision, and smaller universities count on it.

Three-time football national champion Appalachian State University has 85 out-of-state scholar athletes in a variety of sports.

"These smaller schools couldn't possibly afford to recruit out-of-state," Rand said.

Critics argue it's not about winning but fairness.

"It just confounds me that we can continue to justify subsidizing out-of-state athletes," Harrison said. "Actually, I think it's outrageous and indefensible and unconscionable."

House and Senate leaders are still negotiating over the out-of-state athlete provision. Some want it phased out. Some want to include only academic scholarships.

Others, like Rand want to keep it as it is.