JACKSON - More than 3,600 positions would be eliminated and contractual services to state agencies would be cut 9 percent under a budget proposal adopted Tuesday by the Legislative Budget Committee.

"We do have a budget proposal, but I am not turning cartwheels over it," said House Appropriations Committee Chair Johnny Stringer, D-Montrose. "This is the best we can do with the amount of money we had to spend."

The budget suggested by the 14-member committee totals $5.64 billion, compared to a $5.5 billion proposal offered last month by Gov. Haley Barbour.

Republican Lt. Gov. Phil Bryant, who chairs the Budget Committee this year, said, "I wouldn't think any of us agree on all of this budget, but it's a good starting point."

The proposal is one step in the long state budgeting process. Agreement apparently came after what was at times intense debate between House and Senate budget leaders behind closed doors.

The committee's proposal released Tuesday, as well as the governor's plan, will serve as a guideline when the 2010 session starts in early January. At that point the real work of crafting a budget for the upcoming fiscal year begins.

Both the Budget Committee's proposal and the earlier plan by the governor portend the difficulties the full Legislature will have in developing a budget as state revenue collections continue to be historically bad.

In the governor's far-reaching proposal, he cuts most agencies 10-11 percent and proposes consolidating school districts, merging universities, closing mental health facilities and merging other government agencies.

The Budget Committee did not deal with those issues, and members pointed out that the governor's ideas were designed to save money during the budget year that begins July 1, 2011, and still can be debated during the 2010 session.

But their task, as mandated by state law, is to develop a proposal for the budget year that begins July 1, 2010.

The Budget Committee proposal spends $310 million less than what the 2009 Legislature appropriated for the current year's budget. It also spends $830 million less than what has been requested by agency heads.

In reality, the committee's proposal, which cuts most state agencies 10-12 percent, provides about as much in funding as is available this year after the cuts Barbour has made to deal with in lower-than-projected tax collections.

Budget leaders said their intent is to eliminate vacant positions, but Senate Appropriations Committee Chair Alan Nunnelee, R-Tupelo, said, "I don't know if there will be layoffs or not. We are having to make difficult decisions like families and businesses are having to make at Christmas time. They have every reason to expect that of their government. This budget does that."

The state currently employs about 32,000, well below the number of authorized positions.

The committee's proposal does tap sources of money not used by Barbour in his plan. Among them are:

- An estimated $35 million from a tax amnesty program.

- $21 million from the Hurricane Disaster Reserve Fund if permitted by federal law.

- $35 million from the Health Care Trust Fund that was established with funds from the settlement of the lawsuit against the tobacco companies in the 1990s.

- $10 million by increasing certain fees state agencies charge for services.

Barbour said he is concerned that the committee's proposal uses about $145 million from sources not included in his plan.

"About half of this new money is one-time money... for recurring expenses," Barbour said. "I have consistently opposed spending one-time money for recurring expenses and will do so again in the 2010 session."

The committee cuts the Adequate Education Program by 5.6 percent, or about $237 million less than full funding.

With such substantial cuts to the program, which provides school districts with the basics, House Education Committee Chair Cecil Brown, D-Jackson, said as many as 60 districts might not be able "to make their payroll."

He said the Legislature must work during the session to provide them more flexibility and to lessen some of the state mandates.

The budget proposal also cuts travel 35 percent "below already low levels" for the current year and calls on all agencies to "renegotiate all contracts to the extent permitted by law."

Contact Bobby Harrison at (601) 353-3119 or bobby.harrison@djournal.com.