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Gov. Mike Easley says the legislature "cannot ignore reality."

In a statement issued Sunday, Easley said that he is concerned that House and Senate budget writers are not reacting to the reduction in expected state revenues.

"The State Constitution requires that a budget be balanced before I sign it," he said in a statement. "The General Assembly cannot ignore reality. The very latest numbers verify that we remain short of the estimates that legislative budget writers are currently using."

Easley proposes getting rid of $20 million in proposed tax cuts, but keeping pre-kindergarten spending and pay raises for teachers, essentially threatening a veto.

"I want to be clear — the budget must be balanced and have the right priorities for me to sign it. I hope we can build a budget we can all be proud of," he said.

Gov. Mike Easley said this morning that he was puzzled by the decisions of state House members to cut his proposed teacher raises and other educational expense increases.

"It's very puzzling to me how a House who was so progressive on education last year can retrench so rapidly this year, failing to fund More at Four for our predominately minority students, really stiffing the teachers and not providing enrollment increases for college," Easley said.

Easley made his comments to reporters this morning after a meeting of state elected officials.

"It's not only unacceptable, but it's just puzzling to me how they can be that far off the mark," Easley said.

The House's proposed budget did away with Easley's proposed sin taxes increases on cigarettes and alcohol which would have paid for teacher raises and other items. Instead the House's first draft raises certain fees.

More after the jump.

Major pieces of the N.C. House's proposed state budget were released this morning, and they show more money for drop out prevention, a big cut for mental health community support services and a potential stumbling block for Gov. Mike Easley's More at Four pre-kindergarten education program.

The House would devote $15 million for drop out prevention grants to communities, more than double what is in the current state budget, Dan Kane reports. Nearly one out of every three students in North Carolina fail to graduate from high school, and state leaders are looking for ways to keep more students in school.

House budget writers also cut more than $86 million from the mental health community support program.

A recent News & Observer series on the state's mental health services reported roughly $400 million in waste in that program. The cut is $65 million more than Easley had sought in his $21.5 billion state budget proposal.

Easley's senior budget adviser, Dan Gerlach, said the governor will not sit for the way House members funded More at Four.

Correction: An earlier version of this post misstated the cuts.

More after the jump.

Gov. Mike Easley proposed a $21.5 billion budget Monday that would raise taxes on cigarettes and alcohol to help pay for teacher raises and mental health reform.

Easley's budget, a 4.2 percent increase from the previous year, would add a 4 percent tax to beer and wine and a 4 percent tax to liquor to pay for a $68 million fix to the state's failing mental health system.

Easley would raise the tax on cigarettes from 35 cents to 55 cents per pack to pay for public school teacher raises that would average 7 percent. Administrators would receive a 6 percent raise.

This is Easley's last budget proposal. He is prohibited by law from seeking a third term. He has said a major goal of his last year is to get teacher pay up to the national average.

Pay increases would be given at a higher rate for newer teachers, said Dan Gerlach, a senior budget advisor to Easley.

"We all have to keep in mind this is a salary that is going to have to continue to grow if we want a quality education across the nation," Easley told reporters Monday morning.

More after the jump.