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Carolina Budget Woes

States nationwide are facing budget shortfalls as the economy tightens. South Carolina's gap is one of the worst. North Carolina is in much better shape. This week, South Carolina lawmakers are considering deep cuts to higher education, conservation and even pay for state workers in order to make up an 8-percent budget shortfall. Tax revenues signal North Carolina could also come up short in 2009. But Governor's spokeswoman Renee Hoffman says state agencies have been squirreling away money to meet the gap. They're doing it "by holding positions vacant as they come open, unless of course those are mission critical positions like health care or law enforcement," says Hoffman. "Also by limiting travel and training that can be put off until next year." Last month, Governor Mike Easley ordered all state agencies to hold back 2 percent of their budgets in anticipation of a budget shortfall. That should add up to $700 million in reserves by the end of June. Easley may soon ask state agencies to shave another one percent off their spending, since tax figures suggest North Carolina's shortage could top one-billion dollars next year.