PHOENIX - Gov. Jane Dee Hull signed into law a plan passed by the Legislature to balance this year's budget while keeping a $1,450 pay raise for state workers, including UA employees.

The approved package significantly reduces previously promised raises, which had been set at 5 percent for all employees, but it keeps the raises essentially intact for employees making less than $30,000.

"We should be happy we got something," said UA lobbyist Greg Fahey. "That's a very good percentage for people making $25,000-$35,000 a year."

As University of Arizona officials had expected, Hull also line-item vetoed one provision in the budget that would have required agencies to give up half the savings from leaving state jobs vacant.

Had Hull passed that portion of the budget, UA could have faced a $35 million cut, depending on how many people left their jobs.

"That was a really onerous feature," Fahey said. "We're grateful to her for doing that."

The final budget also included an additional 0.25 percent cut for all state agencies, including UA. That cut is expected to cost the university more than $850,000, bringing the total rescission for the current fiscal year to approximately $16.7 million.

Hull also released yesterday her proposed budget for the 2002-2003 fiscal year, which begins July 1. The 2002-2003 budget would erase a shortfall projected at approximately $1 billion.

Key points of her 2002-2003 plan include new across-the-board cuts for most agencies and $240 million of new state borrowing to pay for school construction.

Under the plan, UA would face cuts of 2.25 percent in addition to the 4.81 percent sustained this year, or more than $24 million of its annual state-allocated budget.

"Two-and-a-half doesn't sound like much, but when you add it on top of all of these other cuts, it gets dangerous," UA President Peter Likins said yesterday, referring to the proposed 2.25 percent cut in addition to the 0.25 percent passed yesterday.

Still, Likins said he was expecting Hull to ask for 5 percent more, which would have brought the total cut to just under 10 percent.

University officials have been warning since the first cuts were announced last year that rescissions in 2003 would be larger and have more long-term consequences than this year's.

Under her plan, the university would also suffer an additional loss because Hull's proposal eliminates funding for enrollment growth, which Fahey said totals just under $6 million according to the current legislative proposal.

"It sets a precedent," Likins said. "If (state legislators) take the money away this year, what keeps them from doing it again and again and again?"

Traditionally, the Legislature allocated growth funds based on a formula that gives money to hire one faculty member and one staff member for every additional 22 students who enroll.