Legislators got their first glimpse of Gov. Mike Beebe’s proposed $5 billion budget for the coming fiscal year Tuesday and were told it includes about $89 million in savings from the "private option" plan to expand health care coverage to low-income Arkansans.

The proposed budget for the fiscal year that begins July 1 also includes a $105.8 million increase, $65 million of it to pay for a 2 percent increase in base funding for public schools and a 1.8 percent increase in all adequacy categories.

State prisons also would get additional funding, including $7 million to reimburse counties for housing state prisoners and about $3 million to open nearly 300 prison beds across the state.

Richard Weiss, the state’s chief fiscal officer, told reporters during a break in budget hearings that if the Legislature does not "continue the private option, then we’re looking at probably an $89 million hole in the budget … and we’ll have to come up and redo a whole lot of budgets."

The governor’s proposed balanced budget also takes into consideration about $85 million in tax cuts the Legislature approved last year and go into effect in the coming fiscal year.

Duncan Baird, R-Lowell, co-chairman of the Joint Budget Committee, said after the meeting that the proposed $5 billion budget the starting point for the budget process. Members want to find out the specifics and some of the assumptions about the numbers, he said.

"We’re going to start with his ideas and our ideas and work in a direction that results in a balanced budget at the end of the fiscal session," Baird said, adding that many questions still remain about the overall cost of the private option, the state’s program for using federal Medicaid money to subsidize private health insurance for the state’s working poor.

The private option review is expected Thursday when lawmakers take up the state Department of Human Services’ budget.