Released two weeks ago, Easley's budget proposal touted an effort to eliminate income taxes for low-income wage earners and cut marginal tax rates from 6 percent to 3 percent for others.

An advocacy group said earlier this week that its analysis found that less than half of the number Easley cited would actually benefit, because they already pay no income taxes due to personal exemptions, deductions or tax credits.

The plan is designed to cover the bottom third of taxpayers and their families, or about 1.17 million people, Easley said Tuesday. "Now having said that, there are always going to be some people who file taxes ... and then who, because of (credits and deductions), may not pay taxes anyway," Easley added.

The Easley administration couldn't say how many new people would see their taxes cut under the governor's plan, which his office has said would cost $63 million annually. The North Carolina Budget & Tax Center, which questioned Easley's figures in a report Monday, estimated it would cost $357 million to provide new tax relief to 1.2 million people. -AP

Feb 24, 2007 - Gov. Mike Easley on Friday expressed disappointment that the Navy proposed again to build a jet landing strip beside a national wildlife refuge and for the first time urged Congress to withhold money for the project.

Easley said the Navy's new environmental study shows the Navy remains unwilling to fully consider "reasonable alternatives" despite efforts by his administration to find another site.

"I believe this matter can be resolved, but spending millions of dollars to build the proposed outlying landing field next to a world-renowned wildlife refuge for migratory birds is not an acceptable resolution," Easley said in a letter to North Carolina's congressional delegation. "Congress controls the purse strings for this project, and Congress should withhold funding until the Navy is willing to consider reasonable alternatives."

The Navy has begun assembling 30,000 acres at the site straddling Washington and Beaufort counties to build the $231 million runway. Earlier this month, it submitted a request to Congress for $10 million to continue acquiring land and planning for the site. By Wade Rollins

The $20.1 billion spending plan for the year starting July 1 also is heavy on education and includes 5 percent raises for teachers, rapid expansion of Easley's early-college program through the Internet and college tuition grants for students from poor families. And he recommended that the General Assembly change the rules for the year-old lottery to shift more ticket revenues to prizes - a move he said that ultimately would result in more money for class size reductions, pre-kindergarten initiatives and school construction.

"This budget continues to make education our No. 1 priority," Easley told reporters. "The knowledge level has to increase dramatically for us to maintain our lead and advantage in creativity and innovation and that is something that we cannot ignore." The budget is 6.4 percent larger than last year's $18.9 billion budget. Easley also wants legislators to approve $1.4 billion in bond referenda for the statewide ballot in November, most of which would be used for university buildings, prison expansions and water and sewer improvements.

Democratic leaders at the Legislature, who hope to get the two-year budget approved and back to Easley for his signature before July, generally were pleased with Easley's recommendations, although they will probably differ in the details. By Gary D robertson

Critics allege that Bush is using sleight-of-hand measures that tinker with complex funding formulas linked to the inflation rate. These measures, which include changes affecting Medicare, Social Security and income taxes, aren't advertised as tax increases. But just like hidden tax hikes, they'd raise revenue from millions of unsuspecting taxpayers.

Right now, for example, individual seniors with annual incomes greater than $80,000 and couples with incomes greater than $160,000 pay premiums on a sliding scale for medical services covered by Medicare. The more income beneficiaries have above those thresholds, the less of the bill the government foots.

But under Bush's proposed fiscal 2008 budget, released on Monday, these income thresholds no longer would be indexed to, and rise with, the rate of inflation. As a result, as nominal income rises over time with inflation, more and more people would meet the formula's definition of higher income.

How many more? Leslie Norwalk, the acting administrator of the federal Centers for Medicare and Medicaid Services, said this week that 1.7 million seniors would be affected by 2017.  By Kevin G Hall