North Carolina's revenue shortfall stands at nearly $800 million and could climb to $1 billion before the legislature adopts a budget.

The dilemma has lawmakers scratching a collective head and bemoaning the need to cut spending in an already bleak budget situation.

"We're still in a very serious situation as far as revenue is concerned," state Rep. Jamie Boles said Friday. "There's no pork."

State Sen. Harris Blake added, "It's not going to be painless."

Blake, who was interviewed Friday morning while en route to Raleigh for a meeting of the Senate Committee on Health and Human Services, represents North Carolina's 22nd District.

Both legislators say the shortfall will be greater than the estimated $788 million already mentioned. Neither would be surprised if it reaches $1 billion.

Blake, a Pinehurst Republican, said the shortfall and projected budget figures so far do not include the Medicaid estimate.

He said he hopes North Carolina will receive federal assistance in the half--billion-dollar range, but that is far from a sure thing at this point.

"It's a challenge," Blake said. "It's not my challenge - it's our challenge. It's how we work our way through this."

Blake said the budget seems to be on a fast track toward passage, but no detailed timetable has been established.

The two legislative chambers alternate the budget preparation process, and it is the Senate's responsibility this year. The Senate must first approve the budget, which next goes to the House for further changes. The House changes must be approved by the Senate before it reaches the governor.

Prioritize Spending

Gov. Bev Perdue has already submitted a budget recommendation totaling $19 billion.

"We all agree that we'll have to prioritize our spending," Boles said. "It's a matter of spending what we have wisely, but we can't have any new spending."

Boles, a Southern Pines Republican, said there are still places to cut the budget. He cited the lower tuition fees charged to out-of-state athletes attending state institutions. If out-of-state athletes were charged the same fees paid by other out-of-state students, Boles said, the state could save up to $20 million, money that could be used to good advantage in other aspects of education.

"Those are real jobs for education," Boles said.

Bill Friday, former president of the University of North Carolina system and now a highly respected elder statesman, agrees on the tuition issue, Boles added.

"If the Rams Club or some other group wants to make up the difference, then that's fine, but our taxpayers shouldn't have to shoulder that burden," Boles said, adding that this concept has bipartisan agreement.

Boles said the out-of-state tuition matter is just one example of ways the legislature can prioritize budgeting and spending. He noted that the average taxpayer does the same thing by paying for necessities, such as water and power bills, and then, if there is money left at the end of the month, he or she may choose to eat out or enjoy some entertainment.

Other Big Issues

Two other issues are the subject of heated conversation in legislative halls.

The big one, according to Boles, was a rumor that Sen. David Hoyle had asked the Lottery Commission to look into the possibility of legalizing video poker and taxing it. The issue is controversial, and Boles said both political parties appear in agreement that they don't want video poker in North Carolina.

Laws have been passed on previous occasions to curb the practice, but video poker keeps returning in new shapes that are more or less legal, most recently online.

Hoyle, a Gaston County Democrat, did not run for re-election this year and is leaving the Senate at the end of this year. Boles noted dryly that Hoyle won't be around to live with the political fallout if such a measure were to pass.

Boles said the other big issue, privatizing the Alcoholic Beverage Control system, has died down and it is likely that local ABC boards instead will be drawn into state ethics reform legislation. This would address ethical issues that arose last year when a few county boards were caught in a series of questionable practices. (The Moore County ABC Board was not among the boards with ethics issues.)

However, the major issue before the legislative body is the budget and the gigantic revenue shortfall.

"Our main interest is in tweaking the budget, and everyone wants to get home and run their campaigns for office," Boles said.

That is something Boles and Blake don't have to worry about this year. Blake held off a challenger from former House Co-speaker Richard Morgan in the Republican primary and faces no Democratic opposition in November. Boles is also running unopposed.

Contact Florence Gilkeson by e-mail at florence@thepilot.com.