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State Rep. Hugh Holliman didn't have to resort to National Guard troops to defuse a protest at a recent fundraiser.

Holliman's event at a Raleigh restaurant was to come under withering protest from members of the State Employees Association of N.C. who are unhappy with Holliman's support for financial fixes to the State Health Plan that shift some costs to employees.

Four to five protesters actually showed on the cold and rainy Friday night, said Holliman, a Lexington Democrat. Holliman sent them food.

"We put a tray together and sent it out," he said.

Members of the State Employees Association of N.C. plan to protest a fundraiser for state House majority leader Rep. Hugh Holliman.

The protest, scheduled for 5:15 p.m. this evening outside Caffe Luna in downtown Raleigh, continues the association's reaction to Holliman's support of legislation meant to shore up the State Health Plan.

The legislation shifted some costs to employees and instituted wellness programs that require smokers and the obese to pay more. SEANC had previously launched a radio ad attacking Holliman, a Lexington Democrat.

Sens. Julia Boseman and R.C. Soles Jr. spent the most of any competitive legislative candidate to win their seats.

Boseman, a Wilmington Democrat, spent $871,500 in her race and Soles, a Columbus County Democrat, spent $839,500, according to an analysis of campaign spending by the Program on Public Life at UNC-Chapel Hill.

The list of top spenders did not include candidates who ran unopposed and therefore excludes spending by Senate Leader Marc Basnight, $1.3 million, or House Speaker Joe Hackney, $744,000.

The top spenders in the House were Randy Stewart, a Nash County Democrat ($382,000) and House Majority Leader Hugh Holliman, a Lexington Democrat ($354,000).

Democrats control the House and Senate and have powerful fundraising machines in place. On the Republican side in the House, top spenders were Rep. David Lewis, a Dunn Republican ($232,000) and House Republican Leader Paul Stam, an Apex Republican ($196,000).

Among Senate Republicans, top campaign spenders were Sen. Neal Hunt, a Wake County Republican ($813,000) and Richard Gunn, an Alamance County Republican, who spent $386,000, but lost the race to Sen. Tony Foriest, a Democrat.

Rep. Hugh Holliman has received an award from the American Cancer Society Cancer Action Network for his work in helping to pass a ban on smoking in bars and restaurants.

The law followed years of unsuccessful attempts at a smoking ban for Holliman, a Lexington Democrat and lung cancer survivor.

The annual award is given to lawmakers who demonstrate solid, consistent leadership in the area of cancer-related public policy advocacy. The network is a nonprofit, nonpartisan advocacy organization that encourages government officials and candidates to support laws and policies that would make cancer a top national priority.

"Rep. Holliman’s leadership was the key factor in securing a smoke-free law for North Carolina," said Ashley G. Bell, North Carolina Government Relations Director for the American Cancer Society. "He made this lifesaving legislation a personal priority and ensured its passage and ultimate signing by the governor."

The law, which requires all restaurants and bars to be smoke-free, goes into effect on January 2, 2010. With this measure, North Carolina is the first major tobacco growing state to have a 100 percent statewide smoke-free restaurant and bar law.

Gov. Beverly Perdue succeeded Thursday in blocking a tax package deal struck between the House and Senate just 24 hours earlier.

Senate leaders said they would start over on what taxes to raise and how much because of objections Perdue raised to a proposed 2 percent surcharge on all income tax brackets. Perdue also is insisting on no reduction in per pupil spending for public schools, said Sen. David Hoyle, a Gaston County Democrat and co-chair of the Senate Finance Committee.

"What we're going to do is regroup and replan," Hoyle said.

House leaders generated further confusion when they insisted that the tax deal was still viable.

"It's still on the table," said Rep. Mickey Michaux, a Durham Democrat and senior chairman of the House Appropriations Committee.

House leaders also said they would be writing their own version of the spending side of the budget.

Legislative leaders, already three weeks late in crafting a budget, reached a tax deal yesterday that included the income tax surcharge, a 1-cent hike in the sales tax and a group of alcohol and tobacco tax increases to raise $982 million.

House Majority Leader Hugh Holliman, a Lexington Democrat, expressed frustration that Perdue blew up the compromise. Perdue's staff has been privy to negotiations.

"We would certainly appreciate it, if she has any problems with that plan, that she'd let us know," Holliman said.

Perdue, a Democrat, wants another $200 million, and Hoyle said Democratic leaders don't know where that money will come from.

More after the jump.

A day after telling budget negotiators to hurry up and pass a budget that protects education, Gov. Beverly Perdue said today she can't support the tax deal in the House and Senate.

"I have spoken with the President Pro Tem and the Speaker today and told them that I would not support a budget with an income tax increase on North Carolina’s working families. I reemphasized the need to protect public schools," Perdue said in a written statement.

The current tax proposal would tack a 2 percent surcharge on the income tax bill for every North Carolinian who has to file a return.

"She has made it very clear about how she feels about this tax and she hopes that will spur them in the right direction," said Chrissy Pearson, a spokeswoman for the governor.

Perdue's statement doesn't use the word "veto," but House majority leader Hugh Holliman said the statement has left him thinking that budget negotiators may be headed back to the bargaining table. He said Perdue is also asking for another $200 million in new taxes to pay for cuts to education.

Holliman said extending income tax increases to wealthier state residents could be done.

"Raising the other $200 million will be much harder to do," said Holliman, who added that budget negotiators will have to work through the weekend. The budget compromise was a hard fought middle ground between House and Senate proposals. Reaching a new deal won't be easy, he said.

"It's not good," Holliman said.

Update: Post now includes a more complete description of Perdue's previous comments. 

A bill that calls for a surcharge on homeowner insurance policies across the state if a catastrophic storm wreaks havoc along the North Carolina coast was tentatively approved by a wide margin by the state House.

The bill, which must be voted on again before it moves to the Senate, calls for homeowners to bail out a state-created insurance plan known as the Beach Plan if a storm generates more claims than the Beach Plan can pay, David Ranii reports.

In that event, homeowners would be assessed a surcharge of  up to 10 percent of their annual premiums.

Currently, insurers who offer homeowners policies can be assessed to cover damages the Beach Plan can't pay on a prorated basis, based on how much business they have in the state. Nothing in state law permits insurers to recover any of that money from their policyholders.

The bill proposes capping insurers’ exposure at $1 billion, which supporters — including the insurance industry — say is necessary to avoid insurers fleeing the state.

Bill sponsor Hugh Holliman, a Lexington Democrat, noted that, given the Beach Plan’s current surplus and level of reinsurance homeowners wouldn’t be liable for a surcharge until damages topped $2.4 billion.

So far, the most the Beach Plan has paid in claims for a single storm is $150 million.

The full House will get its first look today at $18.5 billion budget proposal that slashes spending across state government, but spares several programs by including $780 million in new taxes.

The House budget bill made it through a key committee late Wednesday after a contentious debate in which Republicans franticly tried to stop Democrats from using a parliamentary maneuver designed to fend off any changes to the budget proposal.

The Democrats changed the title of the bill to an unwieldy recitation of all the taxes the budget would raise. House rules say amendments can’t be contrary to the title of a bill, which means removing the taxes would be tough.

House Republicans have stood firmly against any new taxes. Democrats have been divided over the issue with supporters saying the taxes are needed to avoid painful cuts to education and social services. The state is facing a $4 billion deficit.

"We had very egregious cuts that a lot of us on both sides of the aisle had trouble with," said Hugh Holliman, the House majority leader and a Lexington Democrat.

Rep. Paul Stam, an Apex Republican and the House minority leader, protested the Democrats’ late move to cut off substantial changes.

"It spends too much. It taxes too much. We’re in a deep recession. We shouldn’t be doing this," Stam said. "It will hurt the economy of the state."

The debate gets testy after the jump.

SEANC is airing more ads against state legislators.

The State Employees Association of North Carolina is running radio ads against Reps. Ray Rapp of Madison County and Van Braxton of Lenoir County, both Democrats. 

As part of an ongoing campaign, ads criticize the legislators for voting for a bill designed to keep the State Health Plan afloat.

"Legislators need to understand this issue is not going away," said Executive Director Dana Cope in a statement. "We will hold them accountable when they make bad decisions, and SEANC will educate constituents when their legislators decide to put a multi-million dollar nonprofit's interests ahead of North Carolina taxpayers."

Previous ads have targeted Senate Majority Leader Hugh Holliman and Reps. Margaret Dickson, Bruce Goforth and Pryor Gibson. 

House Majority Leader Rep. Hugh Holliman is recovering from surgery to remove a portion of one of his lungs.

Holliman, a Lexington Democrat, is a two-time lung cancer survivor and primary sponsor of a new law that will ban smoking in bars and restaurants. The surgery was conducted as a precautionary measure, according to a news release from the House Speaker's office.

A lower lobe of his right lung was removed as a precautionary measure. The portion was not believed to be cancerous.

Holliman is recovering at Forsyth Memorial Hospital in Winston-Salem. He is expected to return to the legislature next week.