MONTPELIER — House Speaker Shap Smith joked Wednesday that if someone asked back in January if Vermont's proposed 2011 budget would move to the floor with unanimous committee support, the answer would have been a resounding "no."

And they would have been wrong.

"I think it is a real tribute to the work that has gone into it and the cooperation from all sides," said Smith, a Morristown Democrat, about the 11-0 vote earlier this week by the House Appropriations Committee on the proposed new budget. "You really can't overestimate the challenges we were facing."

That cooperation between Vermont Democrats, who control the Legislature, and Vermont Republicans, who control the governor's office, will be put to the test today and Friday as House members vote on a 2011 budget that would see the state spending about $3 billion.

House lawmakers will also debate and vote on two other major bills – the 2011 transportation budget and a host of miscellaneous tax fixes.

Vermont's proposed spending plan next year relies on raising about $1 billion for the general fund and using $2 billion in federal funds to pay for state government and its services.

The spending plan assembled and passed by the Appropriations Committee – a legislative body that includes four Republicans – closes an estimated $155 million drop in state revenues due to the poor economy.

Rep. Martha Heath, D-Westford, chairwoman of the Appropriations Committee, said lawmakers agreed with some parts of Gov. James Douglas' proposed budget, but restored funding to some programs and services that were on the cut list based on concerns expressed by the advocacy community.

Some of these costs, such as cutting funding for programs that help families care for the elderly or disabled in their own homes, were restored because the reductions "would end up costing the state more money in the long run," she said.

Rep. Mark Larson, D-Burlington, vice chairman of the committee, said lawmakers were forced to make some tough choices between the state's declining revenue and the need to help out Vermonters suffering in the poor economy.

"Would we rather have Vermonters care for a disabled family member at home while still letting them work?" Larson said, giving an example of the complex human issues lawmakers grappled with. "Or should that individual go to an institution? These are the types of questions we were asking ourselves."

It's not clear yet how Douglas feels about the proposed budget from the House. Although the committee adopted some of his cuts – including about $46 million in reductions to the Agency of Human Services – they also rejected others (including adding about $7 million back in AHS' proposed budget).

Dave Correil, spokesman for Douglas, said the administration is still assessing the proposal. He said there were some provisions the governor was pleased were included, although he did have some concerns about others.

Finance Commissioner Jim Reardon said the administration still has some serious concerns with the budget plan, including that it doesn't "dial back some of the tax increases the Legislature enacted last year."

That includes increases to the capital gains and the estate taxes, Reardon said. He's also troubled by lawmakers' proposed elimination of what is known as the Domestic Production Deduction – a rebate for businesses who produce goods in the United States – a move that is estimated to bring in about $2.5 million.

"Small businesses and individuals are having a tough time out there," Reardon said. "It's important to provide them with some tax relief."

Many Vermonters will feel the impact of the proposed cuts if the budget is approved. These include limiting the number of doctor visits allowed and increasing the deductibles under some state health care programs.

Cuts to the budget, as outlined by Smith's office on Wednesday, include: $15 million from teacher's retirement; $10 million in cost reductions from the union representing state workers; $46 million in AHS reductions and $38 million in savings by streamlining government under the "Challenges for Change" initiative.

Lawmakers are also proposing using $62.5 million in federal funds to build up AHS' caseload reserve — essentially a savings account for the agency.

Smith said the proposed budget relies on no new broad-based taxes.