Gov. Jane Hull on Wednesday called the Legislature into a special session expected to start Monday to tackle the state's budget shortfall and provide more money to fix substandard school buildings.

Lawmakers are considering a proposed package of spending cuts and other changes to reduce a shortfall projected at up to $500 million.

"This can't wait," she said. "It is time for lawmakers to do their jobs."

Hull applauded "those lawmakers committed to addressing the budget shortfall and encourage those who are not committed to become engaged in the process."

Both Hull, a Republican in her final months in office, and Democratic Governor-elect Janet Napolitano have urged current lawmakers to act to reduce the shortfall in the 2002-2003 budget to ease the budget-balancing burden that will still face Napolitano and lawmakers when they meet next year.

"I'd like the Legislature to take care of as much of the '03 budget as they can. This is after all the Legislature that created the '03 budget," Napolitano said, after a meeting with Senate Republican Leader Ken Bennett, R-Prescott.

With revenue slipping below projections and some programs' costs rising, the state faces a projected shortfall of up to $500 million in the $6.2 billion budget for the 2002-2003 fiscal year, which will end June 30.

Hull submitted a $409 million package to reduce most of the current shortfall. Lawmakers are considering a scaled-back version totaling between $240 million and $280 million.

The proposal includes a 5 percent funding reduction to the state's universities, which could mean an additional $10 million permanent cut to the UA's budget.

"We're glad the governor and the Legislature are keeping us at no more than 5 percent, but that 5 percent is going to hurt," said Matt Ortega, a spokesman for the Arizona Board of Regents.

Legislators have accepted nearly all of Hull's spending cuts and came up with replacements for the ones they rejected. They also agreed to use $50 million from a voter-approved increase in the tobacco tax and came up with more transfers from earmarked funds than Hull had sought.

However, lawmakers so far have disagreed on whether they should approve several other proposals accounting for about half of Hull's total.

"If lawmakers don't like my proposal, they have a responsibility to offer up their own plan," Hull said.

The items left out by lawmakers include additional state borrowing to free up dollars appropriated for school building work, spending money set aside for a lawsuit settlement not yet due and imposing a new tax on Medicaid insurance premiums.

While most senators also support additional borrowing and using the lawsuit money, House Republicans have balked at both of those ideas, saying that each would delay but not solve the state's fiscal problems.

Hull said the revenue-bond borrowing for fixing substandard schools is important because that program will run out of spending authority by February but still face a June 30 deadline to award contracts for required work.

Under Hull's proposal, the state would sell bonds to borrow $400 million. Of that amount, $280 million would pay for unfunded school work and the rest would be available to help reduce current and future shortfalls.

Hull's proclamation for the special session does not specifically mention the school borrowing, but Chief of State Rick Collins said the issue falls within the proclamation's section on budget adjustments.

The proclamation also called for lawmakers to consider delaying or repealing a 2002 law requiring that state government switch to self-insurance for health coverage of state workers. The switch scheduled for October 2003 was intended to save the state money long term, but Hull has said it could be a disaster if lawmakers don't provide or raid the $85 million reserve needed.

"We don't think the state would have the discipline to hold onto $85 million under this situation," Collins said, referring to the state's current fiscal woes.