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RALEIGH — House and Senate negotiators have agreed to a $21.3 billion budget that delays two anticipated tax cuts for one year to ensure North Carolina does not fall into a deficit.

House Speaker Joe Hackney and Senate leader Marc Basnight outlined the budget agreement Thursday afternoon, saying that a few tweaks remained but an official, unalterable agreement would be locked in before the calendar turned to July 4.

That would let the General Assembly vote on the budget and send it to Gov. Mike Easley early next week.

Although Easley is a Democrat as are Basnight, Hackney and the majority of members in both legislative chambers, the governor has been openly critical of budget writers. He let loose over the past week with a series of warnings about the flagging economy and what declining tax collections will mean for the state.

Easley has sought cuts from earlier spending targets to make sure the budget does not fall out of balance, something he encountered when he was first elected to office. Legislators have argued that the cuts were not necessary to keep the budget balanced, but relented somewhat.

They had planned to eliminate the gift tax — which mainly taps wealthy families — and boost the earned income tax credit — a boon for lower income workers — immediately. Instead, those steps won’t be taken until a year from now, and taxpayers won’t reap the benefits until 2010.

But the $30 million saved by those delays still falls short of the cuts Easley sought while warning he would not sign an unbalanced budget.

“I believe he’s going to be very happy,” Basnight said. “I think at the end of the day, we did all that we could possibly do to recognize his concerns and fill his wishes.”

Dan Gerlach, a senior adviser to Easley and one of his lead negotiators on the budget, said Thursday that it was too soon to tell what the governor would do with the budget, especially since a formal document was still being drafted.

“We’ll have to spend some time reviewing the bill and the conference report,” he said.

Easley does have the power to veto the budget, something no governor has ever done. He left open that possibility when asked about it Tuesday.

As outlined by the legislative leaders, the budget would give an average of 3 percent raises to public school teachers, with those on the first three rungs of the salary scale getting an extra $1,100.

That is short of the 7 percent average raise Easley had pushed.

But it does help early-career teachers who school officials say earn significantly less than their peers in other states, making recruitment harder for North Carolina school systems.

Most other state workers would get a 2.75 percent increase.

Although the full budget and accompanying documentation had not been released by 8 p.m. Thursday, it seemed unlikely that budget writers heeded Republican calls for deeper spending cuts.

Sen. Phil Berger, a Rockingham County Republican, said the struggling economy likely would result in even less tax revenue than budget writers predict.

“I don’t know of anything that would lead a reasonable person to believe things are going to get better between now and Jan. 1,” Berger said. “I think it’s going to be difficult, based on what I know at this point, to vote for it.”

The budget is a sprawling document, covering two volumes and hundreds of pages even in its most compact form.

It reaches into every facet of the state’s operations and often addresses the most pressing policy questions of the day.

For example, the state’s mental health system has been the focus of news reports for the better part of two years — plagued by troubles from the large mental hospitals to small community providers and roiled by questions about mismanagement.

“We think the mental health budget is a big improvement, made some adjustments that are necessary because of the new management decisions....We’ve tried to provide for a lot of additional money for crises services, and extra beds and some transition money to keep (Dorothea Dix state mental hospital in Raleigh) open,” Hackney said.

Budget writers agreed to authorize about $850 million in borrowing over the next four years and an additional $109 million in cash to construct or plan new buildings around the state. Much of that new construction would be focused in the university system, where officials are expecting steady enrollment increases over the coming years.

The North Carolina Zoo would receive $2.3 million to renovate the polar bear exhibit and begin designing a replacement for the aging African Pavilion.

Other budget highlights include:

* Boosting the enrollment for More at Four, a prekindergarten program that has been one of Easley’s signature efforts while in office.

* Boosting enrollment for Health Choice, a health insurance program for children from low-income families that is jointly funded by the state and federal government.

* Adding $35 million to help schools defray the increasing cost of fueling school buses.

* $50 million to help preserve open space.

* $500,000 to help school nutrition programs that are facing deficits as they produce healthier lunch offerings.

Contact Mark Binker at (919) 832-5549 or mark. binker@news-record.com