RALEIGH, N.C. — Gov. Mike Easley said he is frustrated that North Carolina is on the sidelines while other states rake in the profits from a lottery.

"It's frustrating for me to know we have this big budget shortfall and there is $400 or $500 million laying on the table, not that we are leaving it there, but we are letting Virginia, South Carolina and Georgia walk off with the money that we could be using to educate our kids," he said.

Easley's first budget to lawmakers last year included $300 million dollars in proposed lottery proeceeds. State Sen. Howard Lee, (D-Orange) said you cannot use non-existant proceeds to fill a budget hole.

"We'll have to go out and find the additional $300 million or whatever is required in order to balance our budget," Lee said.

Easley said he plans to get aggressive this year and wants lawmakers to pass a lottery without first putting it to the voters.

"They could vote out this lottery without a referendum. It would be the reasonable thing to do and it would be something that the people wanted done. It would certainly help us with the education of our kids a lot earlier," he said.