Weekly Wrap: Budget, mentally ill inmates, Dix

Feel a bit overextended this holiday season? North Carolina can relate.

State budget officials say the shortfall in revenue after lawmakers cut income tax rates has ballooned to $190 million through the first five months of fiscal 2014-15 and warn that lawmakers will have to make cuts or find new sources of revenue if the picture doesn't stabilize in the next few months.

Lawmakers also are faced with a growing list of needs in next year's budget. State prison officials told a legislative oversight panel this week that they need about $20 million to expand treatment options for inmates with mental illness.

The site of a former state mental hospital continues to be at the center of a tug-of-war between Raleigh and the state – two years after a deal was signed to turn the 306-acre Dorothea Dix property over to the city for a destination park. After lawmakers balked at the sale, Gov. Pat McCrory's administration and city officials have been negotiating a new agreement. Both sides remain hopeful another deal can be reached, but it's unclear when that might happen.