PHOENIX (AP)- Republican legislative budget-writers on Friday offered a $981 million proposal that relies on extensive spending cuts throughout state government and big withdrawals from the rainy day reserve to erase the current revenue shortfall.

Within one saying they were proposing difficult but necessary steps, the House and Senate Appropriations Committees’ chairmen released a so-called ``starting point’’ proposal one day after Democratic Gov. Janet Napolitano updated her plan to deal with the deficit.

``We are going to have to make some painful decisions to get this fiscal house back in order,’’ said Senate Appropriations Chairman Bob Burns, R-Peoria.

Legislative budget staff estimates the shortfall in expected revenue to pay for spending in $10.6 billion budget for the current fiscal year, which began July 1, at $970 million. Napolitano estimates it at $870 million.

Napolitano on Thursday proposed borrowing $393 million for school construction, a $263 million withdrawal from the reserve, $75.5 million in spending cuts and $138.5 million of other changes. She said her approach would preserve spending for vital programs and investments for the future.

Burns and Republican Rep. Russell Pearce of Mesa took a much different course.

Their proposal includes a $350 million withdrawal from the Budget Stabilization Fund but no borrowing and much deeper cuts and other spending deferrals adding up to $631 million.

Along with $246.3 million of 10 percent lump-sum cuts for universities and most other agencies and programs, the proposed reductions would reduce eligibility for subsidized health care for low-income children to save $1.1 million, halt new school building projects await groundbreaking ($42 million) and eliminate some funding for teacher training ($4.5 million) and services for the blind ($500,000).

Other cuts would eliminate a $1.1 million program to subsidize hospitals’ residency programs for doctors, delay a $25 million appropriation for a Napolitano-backed research initiative and divert $106 million in fuel-tax and license-fee revenue from high construction to instead pay for Highway Patrol operations.

Some programs such as basic state aid for K-12 education and health care for the working poor are exempt from lump-sum cuts because of voter-approved protections.

Still, the proposal is expected to draw tough scrutiny from other lawmakers when the committees begin meeting next week.

Napolitano’s office did not immediately respond Friday to requests for comment, but the proposal drew criticism and expressions of concern from some advocates and agency officials.

``It’s very, very ugly and it’s also a repeat of many things that have been proposed and rejected before by the voters and by a majority of the Legislature and the governor,’’ said Dana Naimark, Children’s Action Alliance president.

The proposal to reduce eligibility for the KidsCare health care program would make more than 18,000 children ineligible for coverage, according to Naimark. ``A huge mistake at a time when health care is a top priority for voters,’’ Naimark said.

The roughly $115 million lump-sum cut from the university system at the midpoint in the fiscal year ``would cause major disruption, there’s no doubt about that,’’ Board of Regents spokeswoman Anne Barton said. She added that individual regents had voiced support for Napolitano’s proposal.

Burns said he and Pearce tried but failed to come up with enough spending cuts to rebalance this year’s budget without gimmicks and had to resort to proposing a withdrawal from the rainy day reserve a year early.

Burns said he and Pearce will propose augmenting spending cuts in the next fiscal year with another withdrawal from the rainy day fund and a postponement of a month’s payment of state school funding into the next fiscal year.

According to the chairmen’s proposal, the state faces a projected $1.7 billion shortfall in the next fiscal year, which starts July 1, and $1.2 billion in the year after that.

``The revenue dropoff was considerably more than anybody expected,’’ Burns said. ``The challenge is monumental.’’

Sen. Jorge Garcia, a Senate Democratic leader, said he hadn’t reviewed the proposal by the chairmen but predicted that lawmakers would ``tone it down.’’

Added Garcia: ``I really don’t think we should stop building schools.’’

On the Net:

Chairmen’s proposal: http://www.azleg.gov/jlbc/FY08budgetshortfall.pdf