With federal stimulus funds earmarked to provide more than 5 percent of the revenue, the state budget would grow to nearly $55 billion over the next two years under a plan rolled out by the Strickland administration this morning.

State Budget Director J. Pari Sabety said the budget could not have been balanced without more than $3 billion from the stimulus plan, which has yet to be approved by Congress. Even so, the plan calls for "difficult choices and shared sacrifice." Some areas were cut from 5 to 20 percent of previous spending levels.

The proposal calls for across-the-board pay cuts of up to 6 percent, depending on what employees earn (those making the least would be cut the least). This would apply to both union and nonunion workers under control of the governor's office -- including the governor himself and his cabinet. The budget also provides for lower state payments for employee health care, too.

State revenue will continue to decline through 2010 because of the ailing economy, she said. Ohio's economy will bottom out in the second or third quarter of 2011, but not return to "normal" until 2013 or 2014.

Overall, the two-year budget would grow by 4.4 percent. Next year, appropriations to state agencies would decrease by 5 percent from the spending plan approved in 2007, but it would rebound by nearly 10 percent in the following year.

"State government must be growing now as we face the worst economic recession in 30 years," Sabety said.

The budget also contains dozens of increased fees and fines, such as $892 million in higher franchise fees for nursing homes and hospitals, as well as $236 million worth of higher assessments in areas covered by the departments of Natural Resources, Agriculture, Transportation and others. Vehicle registration fees also would go up $5.75 for passenger cars.

The proposal's attempt to erode state largess to Ohio's nursing homes represents another attempt to take on a powerful lobby that has resisted previous proposals for cuts.

Meanwhile, the separate $7.6 billion transportation budget proposes primary seat belt legislation -- which means Ohio drivers could be cited for not wearing their seat belt even if they commit no other traffic offense. Currently, seat belt citations can only be issued along with another violation. That move would bring $26.7 million from the federal government.

Compared with the current year, 20 agencies got increases (most from the federal stimulus) next year, six would get the same, 33 would be cut, including six that would be eliminated, Sabety said.

The budget includes Gov. Ted Strickland's new school-funding plan, which makes numerous other changes in Ohio educates its children. The new "evidenced-based" model will be tried first in the Cleveland school system.

"It is a comprehensive and systemic reform plan that will move our state forward in the right direction," the budget proposal said.

Funding would increase in 57 percent of Ohio's school districts (348 districts).

The budget included the following breakdown:

* 55 percent of poor rural districts would see growth over fiscal year 2009 (54 of 97 districts). Of these, 39 percent achieve substantial gains of more than 5 percent in additional funding over the prior year (38 of 97 districts).

* 85 percent of the poor urban districts would realize funding increases (87 of 102 districts), and 72 percent achieve substantial growth of more than 5 percent in additional funding over the prior year (74 districts).

* 66 percent of the major urban districts achieve growth (10 of 15 districts).

* Wealthy districts have less growth in funding. The highest percentage (67 percent) of districts that would be flat funded is in the high-wealth suburban category of districts.

The budget also proposes criminal sentencing changes to decrease the prison population; otherwise, the state will be forced to shut down at least one prison, Sabety said.

She noted that as a condition of receiving federal money, the state cannot cut such services as Medicaid, the state-federal health-care program for the poor. In fact, the budget expands coverage for children in families making up to 300 percent of the federal poverty level.

The measure will centralize the administration of 28 boards and commissions to save money. Sabety said she could not immediately say how many jobs would be cut.

The transportation department also would be given the power to levy tolls on new roadways. The transportation budget also contains phase one of the proposed passenger rail connector between Cleveland, Columbus and Cincinnati.

The proposal goes first to the Ohio House, which is now under Democratic control for the first time since 1995. The measure must also be approved by the Senate, where the GOP still holds a strong majority.

The budget must be passed by June 30; it will take effect July 1.