JACKSON (AP) — The budgets of many agencies and programs would be cut under a plan approved Monday by key lawmakers, which also called for tapping up to half of the money in two cash reserves to help keep Mississippi’s government afloat in the coming fiscal year.

The Joint Legislative Budget Committee adopted a budget recommendation approaching $5.4 billion for the fiscal year starting July 1.

Lawmakers had warned that few agencies would be granted the budget increases they requested during fall hearings.

Mississippi’s revenue collections have been sluggish in recent years amid the national economic downturn. And, officials say drafting a spending plan will be particularly challenging because the state will be without $700 million in nonrecurring funds — mostly stimulus money — that disappear at the end of this budget year.

“We have to get on with the program and spend no more than we have,” House Speaker Billy McCoy, D-Rienzi, said Monday. “We don’t have any options for new revenue. No tax increases. No fee increases.”

The broad proposal will be presented to the full Legislature after it convenes in January. Under the plan, universities would be cut by 2 percent compared to the current year’s budget, while the overall budget for K-12 public education would remain nearly level. Funding for community colleges would be reduced by 1.2 percent and the Department of Mental Health’s budget would be cut by 4.4 percent.

All of those agencies, as well as a few other programs, are included in the plan’s footnote for lawmakers to give special consideration for additional funding during the 2011 session.

Department of Mental Health Executive Director Ed Legrand has said if his agency is cut any more it could force the closure of many of its facilities.

“The House is adamant about not destroying the progress made in mental health over the last 30 years,” McCoy said.

Republican Lt. Gov. Phil Bryant agreed that an effort would be made to steer more money to mental health.

“Trying to keep mental patients out of jails is a priority for me,” Bryant said.

The budget committee’s proposal called for using $56.3 million of the state’s health care trust fund and $88 million of the rainy day fund to plug budget holes.

The rainy day fund was created in the early 1990s to provide a financial cushion when money is tight. The state is supposed to set aside a portion of annual revenues for the fund, but that hasn’t been done in recent years because of the faltering economy.

The health care trust fund was created in the late 1990s after Mississippi settled a massive lawsuit against tobacco companies. For the past few years, the state has spent its annual payments rather than saving them and allowing the trust fund to grow.

In Gov. Haley Barbour’s proposed spending plan released weeks ago, most state programs would be cut by 8 percent. Universities and community colleges would see cuts of about 3 percent under his plan. While funding for elementary and secondary schools would remain about level.

Lawmakers didn’t make across-the-board reductions, but many vacant positions were eliminated. Barbour’s plan also recommended using about half of the state’s financial reserves.

Not all of the budget committee members were satisfied with the spending plan approved Monday.

Rep. George Flaggs, D-Vicksburg, said “the footnote is the part of the budget that guarantees tax at the local level.”