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.

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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.

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The House rejected the Senate version of a stop-gap spending plan because it doesn't contain a deadline.

Rep. Mickey Michaux, a Durham Democrat and chief budget writer in the House said he had a problem with the temporary spending bill-which allows state government to run while the legislature works to finish a budget — because it had no built-in deadline.

The current temporary spending plan expires Wednesday. It originally had no expiration date. Of course, the deadline didn't force negotiators to finish their work.

House members overwhelming approved a temporary spending bill Monday night, a little more than 24 hours before the current state budget expires.

"We've got to keep state government operating," said Rep. Mickey Michaux, a Durham Democrat and co-chair of the House appropriations committee.

House and Senate budget writers have to reconcile their two different temporary spending bills by midnight Tuesday. The House version expires on July 15, applying pressure to finish the budget, while senators did not include a deadline in hopes of avoiding having to pass another temporary spending bill if they don't complete the budget in two weeks.

The House approved their bill by 95 to 21 on the first vote and 93 to 23 on the final vote.

Rep. Mickey Michaux, a Durham Democrat and senior budget writer in the House said it's "fairly likely" that lawmakers will miss the deadline and have to adopt a so-called "continuing resolution" which authorizes state government to continue to function in the absence of a budget.

"It looks like the Senate is flagging a lot of stuff that we've been doing," Michaux said, of the budget conference, the meetings in which House and Senate budget writers negotiate a compromise.

Michaux said the continuing resolution would likely authorize state spending at the level of the current year minus a certain percentage to accomodate the steep drop in revenue.

Continuing resolutions, which are technically bills and not resolutions, are nothing new, even in years when the state is enjoying surpluses, said Gerry Cohen, director of the Legislative Drafting Division.

The legislature missed the fiscal year deadline in seven of the last 10 budget cycles.

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House Democrats are considering serious budget cuts.

Next week, state representatives will unveil a budget proposal that would slash state spending by 12 percent, eliminating thousands of state jobs and cutting funding to dozens of nonprofit agencies.

House leaders are not proposing to raise taxes. They would use some federal stimulus money and some fee hikes to fill the gaps.

"You're looking at a bad situation," said senior budget writer Rep. Mickey Michaux. "People are going to be hurt. It's got cuts in it like nobody has ever seen before."

The current state budget is $21.4 billion. Next year's budget would be about $17.5 billion, the size of the 2006 fiscal year budget. (N&O)

Rep. Paul Stam saw the giant inflated bounce sitting on the grassy lawn behind the legislature and wondered aloud what he had gotten himself into.

He was going to be interviewed. While jumping. In the bounce. While a video camera rolled.

The interview was with Mark Roberts, a former WRAL traffic reporter, who is working on a show for the station's Web site.

The segment that landed Stam in the Moonbounce? "Bouncing Around Ideas with the North Carolina Legislature."

Wocka Wocka Wocka.

Stam did his best to ham it up. "This is right where this needs to be because this place is a joke," he tried to a few groans from the few bystanders gawking at the sight of two grown men in suits climbing into a kids' bounce.

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The House approved a bill Thursday that would extend furloughs that are the equivalent of half percent pay cuts to include legislative and judiciary employees.

Gov. Beverly Perdue ordered the furloughs last month after learning that the state was short an additional $1 billion. The state constitution separates the branches of government and Perdue's order applied to the executive branch.

"The separation of powers sort of says she doesn't have any control over the legislature to do this," said Rep. Mickey Michaux, a sponsor of the bill.

The bill also seeks to ensure that retirement contributions and other benefits are unaffected by the furloughs.

Rep. Larry Womble, a Winston-Salem Democrat, said he was concerned that the legislature wasn't trying to spare lower-income employees from sacrifice.

"I don't believe it's fairness when it comes to this if you include janitors, maids, the dishwasher, the person who mows the grass, the one who cleans the bathrooms and mops the halls and clearns our offices," Womble said.

The bill moves now moves to the Senate.

BURR BURNED: U.S. Sen. Richard Burr doesn't have a Democratic opponent yet — unless you count left-leaning commentators. After the Winston-Salem Republican said he told his wife to take money out of the ATM during last fall's banking crisis, he was criticized by liberal talk show hosts Rachel Maddow and Keith Olbermann and took heat from the Huffington Post.

BUDGET SIMMERS: The U.S. Senate was once described as the saucer used to cool hot bills from the House. It's apparently the other way in the state legislature, where chief budget writer Rep. Mickey Michaux said he'll take his time going over the budget bill rushed over from the Senate last week. Check back next week.

TAX DAY: Thousands of protesters gathered across North Carolina on Wednesday to protest the bank bailouts and the size of the federal budget. The so-called Tea Party protests were tied to the date federal income taxes are due. Meantime, the state Department of Revenue said it was running a few weeks behind in sending out tax refunds.

IN OTHER NEWS: A group of Republicans started Carolina Strategy Group to poll voters on state issues and work with business clients. ... Former Congressman and illegal immigration opponent Tom Tancredo was driven out of UNC-Chapel Hill by angry protesters. ... The state House narrowly approved a bill adding a comprehensive sex education option to public schools and passed a major fix to the State Health Plan that will reduce benefits for state workers.