House and Senate budget negotiators reached a final, no more changes, budget deal just before 6 p.m. Monday.

The budget has not been put into a bill form yet, but the plan is to have the document done before midnight so it can be read into the record, a necessary step before any votes could be taken.

The education budget would keep K-3 class size intact. For grades 4 through 12, local school boards would have to cut spending. The order from the state budget would be for officials to try to preserve the classroom as much as possible.

The budget would spend approximately $18.7 billion including about $990 million in new taxes.

Rep. Mickey Michaux, a Durham Democrat and senior budget writer said that state residents will see budget cuts across all categories of state spending. Public education would be cut 4.8 percent or $1.8 billion from last year and higher education would see a 6.2 percent cut or $1.9 billion.

More after the jump.

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House and Senate budget negotiators were finalizing the finer points of the state budget Monday.

The plan right now is to get the document read into the record before midnight so the House and Senate can take its first vote Tuesday. There is no bill to read yet, but lawmakers talked about the basic points.

In education, the current proposal would leave K-3 alone and increase class size in higher grades. Local school administrators would have to find further cuts. Officials would also have flexibility to move money around or tap stimulus funds to mitigate cuts.

"They are far better at determining what needs to be done than we," said Sen. Tony Rand, a Fayetteville Democrat and the chamber's majority leader.

The education cuts would have been far worse without some $990 million in proposed tax increases, said Sen. Linda Garrou, a key budget negotiator.

"Children in North Carolina are going to get a quality education," she said. "I can't tell you the number of teachers we would have lost if you did not have this additional revenue."

Rand said the budget would include some layoffs of state employees.

"There will be some but we've tried to minimize it," he said.

Update: The final budget agreement would not specifically raise class size in grades 4 through 12. Local school officials would have to find ways, including possible class size increases, to cut spending.

State budget writers and representatives of the N.C. Association of Educators exchanged some cross words over the budget and the ed reps' claim that the Senate side is favoring state universities over K-12 classrooms.

The dust up exposed a rift between top Democrats in the legislature and an association that has a history of strong support for the party's candidates, Lynn Bonner reports.

The fight comes at a point in the budget wrangling where key members from each chamber are trying to agree on a budget and a tax package.

NCAE published an "Action Alert" says that Senate budget writers were ready to shortchange K-12 education while supporting public and private universities.

The legislative update quoted president Sheri Strickland saying, "They spend the fall telling the public that Democrats are to be trusted to protect public education. They even come to our headquarters trolling for money and with a straight face talk about the Democratic platform of protecting and professionalizing public education. All the while they are plotting and planning how to gut the classroom in favor of more bureaucracy and unaccountability."

Senators are not happy after the jump.

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They didn't even get close to the deadline.

Democratic Senate leaders agreed to a House demand to put a July 15 expiration on a temporary spending bill.

The bill allows state government to keep operating after the current fiscal year's budget ends at midnight. Under the temporary bill, agencies can keep spending at a level of 85 percent of the current year's budget. The stopgap authority was needed because the House and Senate are still working on a compromise budget for the next fiscal year.

Senate Democrats wanted no deadline on the temporary bill so that, if they don't have a new budget in two weeks, they don't have to stop negotiating to pass another temporary spending bill. House Democrats wanted a deadline to help force a deal -- a "drop dead" date, said Sen. Linda Garrou, a Winston-Salem Democrat and appropriations committee co-chair.

"I may just drop dead by that point," Garrou joked, "if we don't get something done." 

What had appeared a potential standoff that could take the state to the brink of a government shutdown instead ended as a brief, debate-less vote -- 35 5o 13 -- to agree with the House.

The Senate appropriations committee approved legislation Tuesday that will keep state government running if a budget is not passed by June 30.

The bill would let state government spend money at 85 percent of the budget for the current fiscal year, which ends June 30. Committee members held an impromptu meeting clustered together on the Senate floor during a break in the floor session.

The meeting signaled to lawmakers, lobbyists and the rest of the capital crowd that legislators are getting closer to acknowledging that they don't think they will have next year's budget ready on time.

Sen. Linda Garrou, a Winston-Salem Democrat and co-chair of appropriations, said the bill, called a continuing resolution, is a back up plan. Senate leaders remain hopeful they can meet the June 30 deadline.

Update: The Senate voted in favor of the bill. It now heads to the House.

A spokesman for Gov. Beverly Perdue said that the Senate's budget proposal has left the governor "troubled."

“The Senate made some good investments in what we know of its budget so far, but at this point in time Governor Perdue is troubled by the proposed increase in class size," said David Kochman, a spokesman. "An increase of two students per class means eliminating 6,200 teaching positions and reducing the amount of individual attention our kids receive in the classroom.”

Sen. Linda Garrou, the Senate's senior budget writer, said the proposal to add two students to the average class size is intended to be a temporary fix for the state's budget problems. A former teacher, Garrou said the decision was difficult for her.

Fewer teachers would be needed and Garrou said those losses would likely occur through attrition. Schools across the state routinely have to search for new teachers as school years begin. 

The Senate's proposed $20.05 billion budget relies on an average of two more students in classrooms across the state.

Increasing class size to 20 students in K-3 and 22 in grades 4-12 would save $320 million annually, said Sen. Linda Garrou, the senate's senior budget writer and a Winston-Salem Democrat.

The class size proposal is likely to find favor among Republicans who have previously called for the change.

Garrou and her fellow appropriations committee co-chairs gave a peek at the Senate's budget Monday. The full document will be available online at 7 p.m. The details released so far highlight a document that differs from Gov. Beverly Perdue's budget in several key areas.

The budget would lay off as many as 712 state employees and eliminate some 900 vacant positions. Perdue's proposal would have sought to keep layoffs to a pool of fewer than 300 employees.

The leaders of state departments would have targets to meet in cuts. Officials could make the cuts in several ways including furloughs, said Sen. A.B. Swindell, a Nashville Democrat. Perdue said she avoided furloughs because she feared the message it would send to businesses and investors about the state's financial condition.

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Some recent Senate bills of note:

S.B. 943: Expand Film Credit, Sen. Linda Garrou

S.B. 973: Create Dept. of Military and Veterans Affairs, Sen. Tony Rand 

S.B. 992: Authorize Mayors to Solemnize Marriage, Sen. Don Davis

S.B. 994: Establish State Athletics Commission, Sen. Dan Clodfelter

S.B. 1006: Withholding on Contractors Identified by ITIN, Sen. David Hoyle 

S.B. 1014: Lottery Trust Fund, Sen. Doug Berger

S.B. 1018: Reduce Plastic Bag Use, Sen. Josh Stein

An alcohol research center has been funded by drunk drivers.

The Bowles Center on Alcohol Studies has received money from a fee paid by people who had their licenses restored after charges of driving under the influence.

For years, $25 of the $75 fee has gone to the University of North Carolina system to for an endowment for the alcohol research center at UNC-Chapel Hill. Next year, the payments would have totaled about $500,000.

The fee was designed to sunset when the endowment reaches $10 million, which is expected on June 30. Gov. Beverly Perdue proposed to use the half-million dollars to help balance next year's budget.

Rob Nelson, a spokesman for the UNC system, said that the center will now rely on interest from the endowment and grants from national health groups.

Already, some in the state Senate are pushing back.

Sen. Richard Stevens, a Cary Republican, has filed a bill that would continue to give the money to the Bowles Center for annual expenses. One of his cosponsors is Democratic Sen. Linda Garrou, a budget writer.

Update: An earlier version of this post was unclear. The $25 fee itself, not just the transfer of money, would expire this summer if no action is taken.