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LINCOLN -- State senators, with little dissent, passed a package of bills today designed to alleviate the state's $334 million, recession-caused budget gap.

And Gov. Dave Heineman signed the package into law.

But there was a lot of fretting at the State Capitol about whether this was just the first round of budget cutting in what many predict will be a slow economic recovery.

"This just may be the first Band-Aid. I hope not," said State Sen. John Wightman of Lexington, a member of the budget-writing Appropriations Committee.

The budget package contains no increases in state taxes but calls for most state agencies to cut spending by 2.5 percent in the middle of the current fiscal year and 5 percent in 2010-11.

Senators also transferred nearly $70 million from various cash funds to help balance the budget and used about $62 million in savings realized by state agencies last year by not filling vacant jobs and other efficiencies. And state aid to local schools took a $32 million reduction.

State officials said they expect the effects of the budget cuts to be felt next year. One had predicted that up to 400 state employees could be laid off.

Others said that with fewer state troopers, response time to accidents will be slowed and that cuts in state park funds will mean reductions in maintenance. Cuts in state funding also typically translate into tuition increases at the University of Nebraska and state colleges.

"We're going to notice it one way or another," said State Sen. Tony Fulton of Lincoln.

The governor, during a press conference today in La Vista, said state agencies and local schools will do their best to make cuts that don't affect ser

vices.

"But it will be difficult, make no mistake about it," Heineman said. "It's hard to reduce $335 million out of the state budget and not have some impact."

The Legislature bridged the budget gap with $1 million to spare.

Higher education took a smaller cut in what had been proposed -- 1.8 percent this year and 3 percent next year -- to avoid problems associated with federal stimulus funds already accepted by the state.

Some areas of the budget did not get cut, including state road-construction funds, money set aside to address a waiting list for services of Nebraskans with developmental disabilities and funds to operate the troubled Beatrice State Developmental Center.

The three budget-cutting bills passed on the final vote on identical 47-0 votes. A measure that reduces state aid to local schools by $32 million was adopted on a 40-7 vote.

Legislators have been in special session since Nov. 4, when the governor called them back to Lincoln in light of dismal tax revenue forecasts and a 4.4 percent drop in tax receipts last year. State tax receipts are expected to fall an additional 1.3 percent this fiscal year.

Individual income tax revenues, in particular, have fallen, which officials attribute to layoffs, furloughs and cutbacks in salaries and hours during the recession.

Omaha Sen. Tom White, who is running for the Democratic nomination for Congress in Omaha's 2nd Congressional District, was among the seven senators who voted against the state aid cut.

He said senators were unable to get accurate figures on the impact of the state aid adjustment and state job vacancies. He also said he was still upset that lawmakers didn't amend the governor's property-tax rebate program to eliminate $25 million worth of tax breaks that go to out-of-state landowners.

White's bill proposing to do that was ruled outside the bounds of issues that could be discussed during the narrowly crafted special session.

"I can't vote for it (the state aid cut) when we're still sending money to Ted Turner," White said.

While some state senators predicted that the state aid cut to local schools would cause schools to raise property taxes, Heineman, as well as the head of the Legislature's Education Committee, said it shouldn't.

York Sen. Greg Adams said the state-aid cut should slow spending by local schools.

While the 254 school districts in the state have individual budget issues, Adams said, they should be able to manage the cuts within their budget.

State budget watchers are particularly concerned about a $639 million budget gap projected for the next two-year budget cycle, which begins in July 2011.

If the economic recovery is slow, "we're going to be talking about closing agencies," said State Sen. John Harms of Scottsbluff.

Heineman said he remains concerned about lawmakers' actions to soften the budget cuts on state courts, to take $2 million more from a state job training program than he had proposed, and to restore $1 million in spending on state legislative expenses.

Heineman said he hopes legislators will revisit those issues during the regular session of the Legislature, which begins in January.

World-Herald staff writer Tom Shaw contributed to this report.

Contact the writer:

402-473-9584, paul.hammel(at)owh.com