Gov. Dave Heineman Monday unveiled what he called a “specific, detailed and responsible” plan to overcome the state's $333.5 million budget shortfall.

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Heineman called for across-the-board reductions at most state agencies worth $80 million in savings.

His plan also would transfer $37 million from various cash funds.

It includes $154 million in adjustments for programs including state aid to schools and Medicaid.

He called for a $35.8 million cut to the University of Nebraska system, although $10 million in lottery receipts would be shifted over to offset some of NU's pain.

State aid to K-12 schools would not be slashed in this fiscal year; rather, the adjustments would all be made in the second year of the biennial budget. Right now, the number to cut is $47 million.

Heinemen called his proposal one that “requires shared sacrifice” from the “perspective of a middle class Nebraska family.”

“When family income is down, families decrease spending,” Heineman said.

Hence, a narrow call to the Nebraska Legislature - which begins its special session Wednesday - not to increase sales or income taxes.

The proposal left some programs and parts of agencies unscathed: the Beatrice State Developmental Center - which actually saved $6 million by getting an extra two months of federal funding before losing it Sept. 23; child protection workers for the Department of Health and Human Services; funding for those on the developmental disabilities waiting list; the Department of Corrections; and the State Patrol.

Most other departments will feel the sting, Heineman said, including his own office – which may cut down on travel and withdraw from the Western Governors' Association – because of ripple effects from a national economic downturn that occurred more than a year ago.

The impact might be softened by transferring $37 million in cash surpluses from fee-driven agencies, plus money from a new “save it and keep it” budgeting approach by state agencies the last fiscal year that stowed away around $65 million.

Previously, state agencies had spent whatever was left of its proposed budget at the end of the fiscal year – whether it needed to or not – in fear of losing the appropriation. But agencies were told if they didn't spend the money, they'd get to keep it and spend it later.

The governor's latest proposal to resolve the shortfall effectively reneges on that agreement.

“I wish that we didn't have to take it back from them,” Heineman said. “But if we didn't take it back from them, the across-the-board cuts would be much deeper.”

Heineman's plan now goes to the Legislature and, initially, its Appropriations Committee.

Hansen: probably be changed

“It's probably going to have some changes to it,” said North Platte Sen. Tom Hansen, who is on the appropriations committee. “Wouldn't be a special session unless we do something the governor's proposal, I'm sure.”

Hansen said Heineman made the right call by not touching state aid this year, as school districts struggle to alter budgets, mostly made up of teacher salaries, once they've been set.

Said Lincoln Sen. Tony Fulton, also on the Appropriations Committee: “Across-the-board cuts, while useful to get started, still doesn't abrogate my job as a senator to determine whether that cut will help or hinder or negate an agency's ability to do its legitimate job.”

State aid is traditionally one of the toughest budgets to adjust; the formula to calculate aid is almost an annual source of contention, and school districts that can't get property tax bumps often fight against any hint of a decrease.

School districts that can coax voters to approve a bump in the tax levy usually do it, prompting concerns of statewide increases in property taxes.

“But I don't see any way of getting out of cutting state aid in year two,” Fulton said. “To the extent the governor has (cut aid), we'll have to see what kind of feedback we get. No one's going to like it. But – are there any other proposals?”

Heineman said he'd leave it to Education Committee chairman Greg Adams of York to craft and introduce the bill that figures out how and where the $47 million would be cut from specific school allocations.

Gov: Cut expenses, don't raise property taxes

The governor had some sharp, preemptive advice for schools districts playing the property tax card to levy more local taxes.

“They ought to reduce lobbyists, lawyers, and administration,” Heineman said. “They could do it and I hope they do it.”