The state's strategy to use stimulus funds to prevent cuts and balance the state's budget became a clearer Tuesday, as members of House Appropriations approved nearly $40 million in cuts to education for the current year.

The cuts, which will be replaced with federal stimulus dollars, ensure the state will not go through with the governor's plan to spend nearly $60 million in state reserves to balance the state's budget.

The action came during a House Appropriations Committee hearing on SB 50, legislation that will revise the state's appropriation act from the 2008 legislative session. Lawmakers adopted a budget amendment, labeled 50bc, that reduces the current year state aid to education spending by nearly $21 million.

The legislation is part of a broader effort to use more than $55 million in federal stimulus dollars, in place of state general funds, to support the state's budget for FY09.

State budget chief Jason Dilges explained the process to members of the Appropriations committee, saying that the concept had to be discussed carefully.

“It's $55 million in general funds we never had,” Dilges said, referring to falling state revenues. “It will be an expense we don't have to find reserves for.”

According to Dilges, the stimulus package will allow the state to eliminate the state's structural deficit and maintain state reserves through FY11.