Members of the House of Representatives faced a daunting task when they began to craft their proposed two-year budget. In the weeks after the Senate voted on its budget, the revenue forecast for fiscal year 2009-10 (FY09-10) dropped by $1.35 billion. The House’s options for balancing the budget dropped further when Governor Beverly Perdue tapped into federal recovery assistance that legislators had planned to use to help balance the 2009-11 biennium budget. While considerable attention has been paid to the House plan to raise taxes by $783.6 million (or 4% of the proposed budget), the fact remains that for every one dollar in additional taxes in the House budget, there are three dollars in spending reductions. Negotiations between House and Senate conferees could be particularly difficult this year because the two budgets are very different, both in their overall size and in the nature of the tax proposals. This issue of BTC Reports examines the House budget proposal in detail, with a special focus on the impact the proposed tax and spending plans would have on low- and moderate-income North Carolinians.