RALEIGH, N.C. - The annual North Carolina state budget dance is about to begin in earnest now that legislators know how much money they'll have to spend. Republican legislators still have yet to hear formally from their partner - Democratic Gov. Beverly Perdue - about what she'd like.

Lawmakers learned this week they should have a revenue surplus of about $233 million for the fiscal year ending June 30, largely the result of more income taxes being withheld from workers' paychecks, according to a legislative staff memo. House budget subcommittees also have started meeting and have received preliminary orders to locate cost savings in several areas of government. No cuts have yet been directed for public education by the House, a key lawmaker said.

GOP legislators warn most of this year's surplus will probably be needed to close an immediate $150 million shortfall for the state's Medicaid program this year and to close an additional projected gap between revenues and Medicaid expenses for the next fiscal year. That means spending money on any new or expanded programs likely will occur when cost-cutting frees up additional funds.

The General Assembly reconvenes May 16 to take up the Medicaid issue and adjust the second year of the two-year state government budget that was approved in 2011.