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Budget Writers Paint Dire Financial Picture

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RALEIGH — State Democratic leaders say without a taxincrease they may have to drop state employee pay increases, reduceteacher bonuses and eliminate cost-of-living increases for stategovernment retirees.

They also discussed eliminating Governor Mike Easley's plan toreduce class sizes.

The Democrats are trying to build public support for a taxincrease as the state faces a budget hole of at least 167million dollars. The House and the Senate have already had to trimabout 600 million dollars from their proposed budgets thisyear.

They have been trying to settle on a final budget as the statefaces its worst financial crisis in ten years.

Republicans accuse the Democrats of trying to scare the public.

They say the state should consider less drastic cuts. Theypropose eliminating about two-thousand-900 vacant state jobs,cutting money to nonprofits and cutting money from school systemcentral office staffs.