This weekend, House and Senate lawmakers could give counties that option if they adopt the budget proposal that Basnight and House Speaker Joe Hackney worked out. Legislative leaders said Thursday night that they have the votes to pass the compromise budget, despite heavy opposition from real estate agents and home builders who have spent hundreds of thousands of dollars in campaign contributions and lobbying campaigns.

The vote will put many lawmakers opposed to the levy on real estate transactions in the position of having to support it in order to pass a budget that includes things they like. The proposal includes more than $850 million for construction at UNC campuses and state prisons, water and sewer projects, and green space preservation; a minimum of 4 percent raises for state employees; and $37 million for additional judges, prosecutors and court staff.

Wake and other fast-growing urban counties have clamored for options to raise revenues beyond increasing property tax. They like the idea of using a land transfer tax to pay for new schools and other infrastructure because it is more closely tied to growth.

At the same time, poor, rural counties are struggling to keep up with rising Medicaid bills. They have wanted the state to assume their share of that tab so that they, too, can keep property taxes down. The budget proposal aids both groups. The counties would swap a half-cent of their sales tax revenues in exchange for the state's taking over their Medicaid bills.

The proposal then allows the counties either to increase local sales tax by a quarter-penny, or increase the land transfer tax that home sellers pay from 0.2 percent to 0.6 percent. Neither tax increase could be done without voter approval, something many lawmakers insisted upon.

Six counties in northeastern North Carolina have a 1 percent transfer tax, and officials there say it has helped keep property taxes down. By Dan Kane