HELENA — Gov. Brian Schweitzer outlined his budget Thursday, stressing big spending on education, property tax cuts and saving many millions in a new state savings account.

The governor’s plan, required by law to be released the Nov. 15 before each legislative session, includes increased spending of $775 million. About $375 million of that is for one-time-only projects, meaning that money wouldn’t be figured in to state budgets of the future.

Schweitzer also proposed a spending cap of $1.8 billion per year, with any money coming in on top of that going into what he envisions as the Big Sky savings account. Schweitzer said the savings account would be a way for the state to put money aside in good times to be spent when state coffers aren’t so flush.

“In Montana we have good years and bad years,” he said. Right now, with an estimated $1 billion budget surplus, the state is having one of its good years, Schweitzer said. But, inevitably, state budgets will contract — as it did in 2003 — and Schweitzer said he wants to save for another rainy day.

Currently, Montana spends about $3.1 billion every two years running all of state government. Schweitzer’s budget would push that to almost $3.9 billion, but that figure includes the tax cuts and one-time spending.

The budget also included $150 million in tax cuts, including $100 million to resident property tax payers, doing away with a proposed new tax on water users and omitting 30,000 small businesses from a special property tax that only applies to businesses. On property tax relief, Schweitzer proposed spending $100 million to give all Montana residents who pay property taxes a $400 one-time rebate

Schweitzer proposed some of his largest spending on education, both in elementary and high schools and to freeze tuition increases for Montana college and university students.

He proposed spending $230 million more on elementary and high school education an increase that comes on top of almost $160 million pumped into education in the last two years.

Some $25 million of that would go to create all-day kindergarten.

Schweitzer said the increases in education spending were needed because for many years, the Legislature cut money for education, leading to increases in property taxes, tuition and a backlog of repairs needed at many Montana schools.

Schweitzer proposed pumping $56 million into mental health services, including expanding community mental health services and dealing with overcrowding at the state’s hospital for the mentally ill in Warm Springs.

The budget also includes leaving $100 million unspent in case of emergencies. By law, the Legislature must leave a certain percentage of money untouched, although Schweitzer’s proposed $100 million is the largest in recent memory.

The budget also called for more spending on a special health insurance program for children of the working poor, although it was unclear how large the increase would be and Schweitzer didn’t list the program as among his highest priorities.

Sen. Corey Stapleton, R-Billings, and a leader of Senate Republicans, said he was encouraged by some of the governor’s ideas, but said Republicans have some ideas of their own, especially regarding property taxes.

Republicans have supported a plan that calls for permanent property tax reduction — not one-time rebates. Such a plan would not result in all taxpayers getting the same rebate.

Stapleton said he didn’t think the governor’s rebate plan was true tax relief.

“It’s transferring wealth from (oil and gas development in Eastern Montana), mostly into the cities,” he said. Still, Stapleton said he didn’t think Republicans and the governor were “so far apart that we can’t meet in the middle.”

Republican House Floor Leader Rep. Michael Lange, of Billings, said he proposes reducing college tuition for Montanans, an idea supported by many Republicans.

Democratic Sen. Mike Cooney, of Helena, and chairman of the Senate’s main budget committee, said he liked the governor’s plan because it calls for new spending in critical areas, but saving money and returning some to taxpayers.

“This is an investment in families, in jobs, in Main Street Montana,” Cooney said after the announcement. “I’m pretty pleased. It sounds solid.”

As for disagreements about property tax relief, Schweitzer hinted he hasn’t shut the door on the Republican idea.

“I’m willing to entertain anybody,” he said.

Quick look at Schweitzer proposals

HELENA — Gov. Brian Schweitzer on Wednesday released his proposed state budget for the 2008-09 biennium. Here’s a quick look at the highlights:

- Total spending: Schweitzer is proposing to spend an additional $625 million of general fund money, an increase of about 20 percent over the previous two-year period.

- One-time spending: That spending includes about $225 million of spending on “one-time” projects or expenditures, such shoring up the Teachers Retirement System and a school building fund.

- Tax rebates/cuts: $150 million, including $100 million in property-tax rebates to homeowners, $30 mil-lion in business-equipment taxes for small businesses, and $20 million in water-adjudication fees.

- New “Big Sky Savings Account” Reserve Fund: The governor is capping state spending at a certain level, and any revenue beyond that amount will go into a rainy day fund. If administration spending plans are adopted and revenue comes in as expected, the account will have about $80 million by mid-2009.

- Other reserves: The administration is proposing year-end budget cushions of about $125 million, includ-ing set-asides to pay for possible firefighting costs.

- Public schools: Schweitzer wants to increase state spending on public schools by $230 million, including $25 million for full-day kindergarten in any school district that chooses it and $50 million for school con-struction and maintenance. The state would greatly increase per-pupil expenditures in several areas.

- University funding: A $50 million increase in state funding that would freeze in-state tuition at Montana colleges.

- State employee pay plan: Base salary increase of 3 percent, with some other adjustments for health cover-age and longevity.

- Retirement systems: A $100 million infusion of cash into the Teachers Retirement System, to shore up its long-term shortfall. Also, new employees would have a lower guaranteed adjustment for their retirement.

- Mental health: Nearly $56 million for new facilities for the criminally mentally ill, and more community-based care centers for the mentally ill.

- Corrections and public safety: An additional $40 million for new and expanded programs, including more parole officers, methamphetamine treatment centers and higher pay for correctional officers.

- State parks and fishing access: $15 million for acquiring new public recreation access sites and state parks.