Brief look at a $20 billion budget

Here's a breakdown of the budget agreement by Senate and House leaders:

MEDICAID RELIEF AND LAND TRANSFER TAX

The state would take over the counties' 5 percent share of Medicaid bills in exchange for a half penny of their sales tax revenues. Poor, rural counties in particular are expected to come out ahead on the deal, since Medicaid costs are expected to grow faster than the sales tax revenues. The counties will have the option to raise their sales tax by a quarter penny or their land transfer tax from 0.2 to 0.6 percent, but only through a voter referendum. Fast-growing urban areas had sought the land transfer tax option to help pay for new schools and other infrastructure.

STATE EMPLOYEES

RAISES: Most state employees would receive a 4 percent raise. Judges, teachers, community college instructors and UNC faculty would receive a 5 percent raise. Retirees would receive a 2.2 percent cost of living increase.

STATE HEALTH PLAN: Language in the agreement would put an end to the traditional indemnity health insurance offered to state employees by the next fiscal year. Another preferred provider organization plan will be added to their coverage choices.

TAXES/FEES

SALES TAX: That temporary sales tax increase first passed in 2001? The budget agreement makes part of it permanent. While lawmakers shaved the tax increase in half, down to a quarter-penny last year, the agreement says they will keep the remainder. That would put the combined state and local sales tax at 6.75 percent.

INCOME TAX: Those in the top income tax bracket fared better. They were hit with a half-percentage point increase in 2001, which also was cut in half last year. The agreement allows that tax to expire at the end of the year, putting the tax rate for upper income earners at 7.75 percent.

EARNED INCOME TAX CREDIT: Meanwhile, the working poor would receive an earned income tax credit worth $45 million that allows for some recipients to receive more in a tax break than they would pay in income tax, but the break would not exceed their overall tax burden.

TOBACCO TAX: The tax on tobacco products other than cigarettes would go up 10 percent to help pay for cancer research at UNC-Chapel Hill.

GAS TAX: The state gas tax would be capped at 29.9 cents per gallon.

COURT FEES: Various fees will increase to raise $37 million to pay for additional judges, prosecutors and court staff.

CAPITAL PROJECTS

More than $850 million would be spent on 66 projects that include UNC research buildings, prison expansions, $100 million in water and sewer bonds and $120 million for land preservation. Borrowing through certificates of participation -- which do not need voter approval -- would cover $554 million in projects; the remaining $305 million in projects would be paid for out of the general fund. Borrowing would be spread out over at least the next three years to protect the state's credit rating.

HEALTH CARE

CANCER RESEARCH: UNC-Chapel HIll would receive $25 million this year, $40 million next year and a recurring $50 million for future years for cancer research. A 10 percent tax increase on tobacco products other than cigarettes and $8 million from the Tobacco Trust Fund would help pay for it. The budget also includes $8 million in planning money for a cancer research facility.

CHILDREN'S HEALTH: $300,000 this year and $7 million next year to expand government-subsidized health insurance for children.

MENTAL HEALTH: $20.5 million increase this year for mental health programs.

LOTTERY

The law that sets up how lottery revenues are allocated would be tweaked so that lottery officials can offer bigger prizes on scratch-off tickets. Gov. Mike Easley wanted this to try to get more people playing and increase ticket sales.

EDUCATION

LEARN AND EARN: The proposal gives $60 million toward an expansion of the Learn and Earn program that provides financial aid to needy students so they can get a bachelor's degree from a UNC college debt-free.

EARLY CHILDHOOD: The More at Four pre-kindergarten program would expand by $56 million.

CLASS SIZE: The effort to reduce class sizes would get $37.5 million.