RALEIGH — Governor Jim Huntreleased his funding wish list Monday, and now it is up to lawmakers to decide who gets what.

In his "State of the State Address," Hunt announced an ambitious plan to make North Carolina's schools the best in the country by 2010.

Monday, he explained how he plans to pay for it. Two-thirds of the budget Hunt unveiled is devoted to education.

Public school teachers would receive eight percent pay raises under the governor's budget. Hunt would commit $255 million toward raising teachers' salaries to the national average.

Smart Startwould also receive multi-million dollar funding increases. Hunt says the early childhood program is underfunded in half of North Carolina's counties.

He wants to devote another $81 million toward the child care and health care that Smart Start provides.

"This budget directs nearly two-thirds of our new resources to education to keep us on track to becoming first in America by 2010," said Hunt.

Other big budget items include $54 million for mass transit and road repairs, $14 million to fight water pollution, $9 million for juvenile justice reform and nearly $6 million to improve monitoring at rest homes.

Hunt says his budget is balanced, but it does not account for $354 million the state must pay to refund the intangibles tax.The legislaturewill not know exactly how much it can spend until those refunds are sorted out.

"If it's $354 million spread out over three years, you can divide it by 3 and see how much it reduces each year," said budget officer Marvin Dorman.

The governor could present other options to help pay for the intangibles refunds. None of them are popular.

They include setting aside money that is already earmarked for the rainy day fund, repairs and renovations and the clean water trust fund.