After four years of "famine"-forced budget-cutting, Gov. Olene Walker released an $8.6 billion budget flush with funding for students and teachers, university libraries, raises for state employees, prison beds, open space and $72 million for the state's rainy-day fund - all without a tax increase.

New jobs and growing incomes will boost state revenues an estimated $370 million next year, a 10 percent increase. And state leaders have $235 million in extra cash this year to pay for one-time projects, like building construction.

But even as she released the 25th budget she has worked on - including her years as a legislator and lieutenant governor - Walker acknowledged she was sending the document off to be diced up by lawmakers and Gov.-elect Jon Huntsman Jr.

"This budget will only be mine for a few weeks," said the outgoing governor.

Huntsman said Friday he generally supports Walker's fiscally conservative strategy for saving a big chunk of the surplus. He plans to use Walker's budget as a template for his own, which he indicated he will submit by the Jan. 20 deadline.

"We must use these resources wisely and not rush to spend," Huntsman said. "Our administration will seek to improve efficiencies within state government and use every penny prudently."

Earlier this week, Lt. Gov.-elect Gary Herbert suggested the new administration wants to cut up to 1 percent from the state budget - or more than $80 million. Only about 10 percent of the budget is discretionary spending not dedicated to education or Medicaid.

One factor that hints at continuity between the old and new spending plans is Huntsman's retention of Walker's budget director, Richard Ellis.

"The mastermind behind this budget will continue to be the mastermind behind Huntsman's budget," Walker said.

She made one last-ditch pitch for her broad tax-reform plan as a way to relieve state dependence on volatile sales taxes, mentioning it several times Friday. But none of the changes is built into her budget plan.

House Minority Leader-elect Ralph Becker, a Democrat from Salt Lake City, expects Huntsman's budget to closely mirror Walker's. "She's proposed a lot of things that, to me, make a lot of sense," he said.

But Republican lawmakers started tinkering with Walker's transportation funding proposals almost as soon as she briefed them Friday morning. Utah County legislators hold several leadership posts in the House and Senate and they want Interstate 15 reconstruction in Utah County to be a priority. So far, the highway has been widened from the Salt Lake-Utah county line to Alpine. The state Transportation Commission is assessing Utah County needs in an Environmental Impact Statement that will be released in 2007.

In the meantime, House Majority Leader-elect Jeff Alexander, a Provo Republican, said one idea is to shift more money from other areas to the Centennial Highway Fund, a 10-year collection of $2 billion worth of projects. "If we can get the cash back and have the Centennial [debt] out of the way, we can move on to other projects," Alexander said. "There's a lot of work ahead."

Walker urged the governor-elect and lawmakers to consider carefully before slashing through her budget to fund pet projects or prove their own conservatism. Most of the new funding, she said, simply restores state programs gutted by four years of recession.

"We've cut and cut and cut," she said. "Look at [the budget]. Analyze the programs. If you can find areas where you can cut, then you should cut."

Some applauded Walker's use of the state's windfall.

No state agencies benefitted more than education. The governor proposes increasing the weighted pupil unit (WPU) 5 percent next year at a cost of $79 million. The WPU pays for teacher salaries and basic school expenses. At the same time, Walker would add $34 million for school enrollment growth. Another $16 million would pay for a math initiative for fourth-, fifth- and sixth-graders. State colleges and universities would get $24 million for employee compensation packages under the plan.

Although schools asked for $62 million to cover enrollment growth, and the WPU increase still leaves Utah dead last in the nation for per-student spending, Utah Education Association President Pat Rusk said, "We're excited we're going to be able to provide competitive salaries - maybe."

Teachers and state employees this year received a 1 percent salary increase and 1 percent bonus. But many lost ground when factoring in increased health-insurance costs.

Utah Taxpayers Association Vice President Mike Jerman credited Walker with not increasing taxes. But he cautioned against early celebrating. "It's the most optimistic budget that's been presented for several years," he said. At the same time, "everyone realizes that we have some serious things coming up in education and transportation. Government will never have enough money."