Gov. Mike Easley took a hard shot Friday at lawmakers blocking a land transfer tax option for counties -- a hotly debated proposal that has stalled a $20 billion spending plan for schools, prisons, mental health programs and many other services.

"I think that a lot of the legislators are scared of the Realtors and they've got to decide: Do they stand with the Realtors or do they stand with the people they represent?" Easley said.

Easley's tough talk came as prospects for a state budget anytime soon dimmed. He expressed frustration at the lack of progress and announced that he would use his authority as the state's top executive to bypass the legislature and authorize $114.4 million to cover growth in three education-related programs. Two of them are Easley initiatives -- the More At Four pre-kindergarten and school class-size reduction programs -- while the third is a fund to help poor schools provide a sound education.

House Democratic leaders and Easley, also a Democrat, want the land transfer tax option in the budget. Senate Democrats did not go along, although their leaders recommended a budget proposal that included a .4 percent land transfer tax last month.

Real estate agents, home builders and other groups generally opposed to new taxes have fought hard against the land transfer tax option. They say the tax would unfairly hit homeowners and depress home sales.

Advocates say the tax targets an industry that contributes to the growth that has left some counties struggling to pay for new schools and other kinds of infrastructure. Wake County in particular is hard pressed to find space for the thousands of new students that enter its schools every year.

Expensive argument

The debate has provoked six-figure spending by both sides on ad campaigns and lobbying. Real estate agents have the edge in campaign contributions, though, spending more than $600,000 on legislative candidates in the last election.

The proposal does not force a tax; it gives counties the option to hold a voter referendum on it. Easley said voters in some counties might approve the tax to keep their property taxes from increasing. Six counties in the northeastern corner of the state have a 1 percent land transfer tax, and officials there say it has helped them keep pace with growth while holding down property taxes.

But in the two decades since Senate leader Marc Basnight helped get those counties the right to impose the tax, no other county has been given that option. Basnight said that when he tried to add Tyrrell County a few years ago, he found little support.

Still, Basnight disputed Easley's remarks, which appeared directed at Senate Democrats.

"He's a very good governor; I have great respect for him," said Basnight, a Manteo Democrat. "Even when he's wrong, he believes he's right. He obviously is wrong in this respect."

Rick Zechini, a lobbyist for the N.C. Association of Realtors, dismissed the governor's remarks.

"This is an issue of significant importance to homeowners across the state, and they have let their wishes be known to legislators in both chambers," Zechini said.

Basnight said most Senate Democrats support a land transfer tax option but don't want it in the budget. Basnight said he prefers that the House pass it in a stand-alone bill and predicted it could get through his chamber. He also said the House could add it to legislation the Senate passed this week to take over the counties' Medicaid bills in exchange for a piece of their sales tax revenues.

Shaky support

But House leaders say they want the land transfer tax option in the budget to give it a chance of getting through the House. Support among Democrats there is shaky as well. "We can't get it passed the other way," said Rep. Jim Crawford, an Oxford Democrat and a chief budget writer, "and I'm not sure that [Basnight] can get it passed either."

Easley said he authorized the education funding because he could not wait for lawmakers to resolve their budget issues.

"School is starting soon, and we need to get contracts in place so we can hire teachers and make sure our children have the tools they need to succeed," Easley said.

House and Senate leaders did not challenge the governor on the move, which he has done twice since taking office in 2001.

Unresolved issues

The House and Senate have until July 31 to get a budget in place before a stopgap spending law expires. Budget negotiators said there are three major issues that must be resolved:

* House leaders and Easley say a land transfer tax option for counties should be included in the budget. Senate Democrats have balked at that and say they want the issue considered separately.

* The Senate wants to spend $50 million over the next three years on cancer research. The House did not include it in its proposal. There is talk of increasing the tax on smokeless tobacco products to help pay for it. Basnight, whose wife died recently after a long illness, is pushing hard for the funding.

* Easley wants lawmakers to fully fund his newest education initiative: an expansion of his "Learn and Earn" program that would allow low- and moderate-income students to get college tuition debt free. House and Senate leaders say they are generally supportive, but they question devoting $50 million in the first year, when it will likely take longer than that to get the program running.