When Gov. Jim Hunt unveiled his budget two weeks ago, he was resolutely upbeat. “There’s no question that this is a tough budget year and we had to make some tough decisions,” he said, at a press conference in Raleigh. “But our economy is strong, and we have what we need to do the job.”

The ongoing costs of hurricane relief, a drop in the state tax base and two expensive lawsuit settlements mean that job has to be done with $331.9 million less than lawmakers had expected. But by “redirecting” and proposing new borrowing, the governor still scrounged up $729 million in added spending for next year.

Hunt appeared unfazed by a $91 million shortfall in the current budget and a projected $450 million gap for next year. “This is a year to prioritize,” he said. “If you can’t do everything, you do the most important things.”

So what are the priorities in the $13 billion spending plan Hunt sent to the General Assembly? Here are some highlights and “lowlights”:

A one-time reduction of $49 million in Smart Start, to be followed by $67 million in 2001 to expand the early childhood program to all 100 counties. The largest portion of new spending: $281 million to bring teacher pay to the national average. No money, though, to help low-performing students or those with limited English skills.

No new money for capital improvements, and no funds for repair and renovations of state buildings. Also, no increase in last year’s appropriation of $5.2 million in new funds for public transportation.

A mere $3.4 million in new funds for mental health–compared with the $15 million to $20 million health-care advocates say it will take to begin easing the crisis in the system.

Three percent raises for state employees–significantly less than the 11 percent hike the N.C. Employees Association is seeking. Lawmakers are now debating a 5 percent raise in exchange for lower state contributions to workers’ pension plans.

A $13.65 million spending cut for the Department of Correction, including funds for food, electricity and employee physicals. Daily payments that inmates on work release must make will be upped by $1 to $15. That will save $325,000. (Guess every little bit helps.)

A scant $36 million left in the state’s “rainy day” fund for unexpected emergencies. Anyone remember Hurricane Floyd? Before the hurricane, the rainy day fund was $616 million. Last year, $286 million went to hurricane relief; the rest helped pay settlements of a lawsuit over the state’s intangibles tax.