A combination of targeted cuts, tapping the state’s savings account and federal stimulus funds will be used to balance this fiscal year’s budget, the governor and legislative leaders announced Tuesday. The monthly allocation for most state agencies will continue to be reduced by 10 percent through June, the end of the fiscal year. Some agencies will be spared 10 percent cuts. A handful of agencies in education, health and public safety will subsequently receive additional appropriations to supplement their budgets this year and decrease their share of the overall reduction, according to the agreement. As part of the pact, priority status was assigned to public schools, higher education, the Oklahoma Health Care Authority and prisons. Each will receive a supplemental appropriation. Even with that action, every state agency will receive some level of targeted cuts for the current fiscal year. "Given the magnitude of the crisis we face, there really were no good options available to us,” Gov. Brad Henry said. House Speaker Chris Benge, R-Tulsa; Senate President Pro Tempore Glenn Coffee, R- Oklahoma City, and Henry also agreed to use the Rainy Day Fund and state stimulus funds to help balance the budget. The state has about $600 million of federal stimulus funds still available and about $600 million in the Rainy Day Fund. About $223 million of the Rainy Day Fund will be used to balance the 2010 fiscal year budget; the rest will be available for the 2011 fiscal year. To receive about $1.2 billion in stimulus funds, the state was required to maintain certain funding levels for public education and health care. The budget agreement, coming days before Monday’s start of this year’s legislative session, applies only to the current 2010 fiscal year. No decisions have been made for the 2011 fiscal year, which starts July 1. The proposal will be presented next week to legislators. Legislative leaders are hoping for quick passage so lawmakers can focus on the 2011 budget. The state is projected to have a $729.4 million revenue shortfall this fiscal year. Cuts already announced have reduced the projected deficit to about $530 million. For the 2011 fiscal year, legislators are faced with developing a $5.3 billion budget, which is about 20 percent, or $1.3 billion less, than the budget approved last year. The 2010 fiscal year budget of $7.2 billion was made up of about $6.6 billion in state revenue and about $630 million in federal stimulus funds.