N.C. Lawmakers Gear Up For Election-Year Balancing Act

North Carolina lawmakers passed two years' worth of balanced budgets to cover the state through June of 2005. Though it still is early, tax revenues are in line with projections.

But the budget does not include hundreds of millions of dollars in spending that will affect thousands of state workers. That makes for an election-year balancing act.

Even if tax revenues keep meeting projections, budget analysts point out there still is plenty of uncertainty -- and the state could face a $500 million to $800 million shortfall.

"It's not as big as it has been in the last two or three years, but it's still quite large," said Elaine Mejia, of the

North Carolina Budget and Tax Center.

In an election year, there is added pressure to please state employees with at least $180 million in pay raises. There also is a push to cover bonuses for teachers at schools that meet high

ABCs

standards.

State facility repairs and the rainy-day fund also are high priorities.

Not one of them is in next year's budget.

"I don't expect that the governor's budget will have a tax increase in it," Mejia said, "and I don't think spending cuts are as easy to find as they were."

According to Wake County Republican Rep. Sam Ellis, the biggest obstacle for lawmakers will not be plugging the potential shortfall. It will be navigating through election-year politics.

"Elected officials tend to be on pins and needles and don't want to take any risk and don't want to do anything controversial that might be considered controversial," Ellis said. "I don't think it's going to be hard to find the money. Finding the will to cut somebody's program in an election year is where you really run into problems."

Ellis said

Triangle Transit

and

Smart Start

should be targets for cuts. Other budget analysts said Medicaid eligibility could be vulnerable.

Easley's office, meanwhile, said it is still too early to predict what will happen.