NASHVILLE, Tenn. -- The state Legislature adjourned for the year after lawmakers passed a $27 billion state budget that cuts jobs and education and health care spending to fill a nearly half-billion-dollar revenue shortfall.

Related: Read Cara Kumari's Blog From the Legislature | Video: House, Senate Reach Agreement

Only one senator and four House members cast "no" votes late Wenesday against the budget package laid out by Gov. Phil Bredesen, who is now expected to sign it into law.

The lawmakers approved offering buyouts to state workers to cut about 2,000 jobs, reduce spending for colleges and universities, give up on adding more pre-kindergarten classrooms and scrimp on increasing money for K-12 education.

Bredesen in January proposed a state budget of $27.8 billion, which was $170 million lower than the current year. But sharply declining revenues since then led the governor to propose another $468 million in cuts.

"We did the best we could do with the budget given the financial condition of the state and given the economy we're dealing with," said Sen. Doug Jackson, D-Dickson. "I think it's a responsible budget and I think it represents a lot of hard work among members of the Senate and the House."

Sen. Mae Beavers, R-Mt. Juliet, said the budget cuts, which take effect July 1, didn't go far enough and voted against the measure. Republican Reps. Joey Hensley of Hohenwald, Jimmy Matlock of Lenoir City, Brian Kelsey and Eric Swafford of Pikeville also voted against the measure.

"I felt like they're spending like drunken sailors," said Beavers, who voted against the budget last year too. "I didn't agree with a lot of the pork that was in the budget this year, despite the fact we're laying off state employees."

Despite little opposition to the spending plan, which takes effect July 1, lawmakers delayed the budget vote until late in the evening so a compromise could first be worked out over changes to the lottery scholarship program.

The staffing cuts -- which represent 5 percent of all state employees -- are meant to save about $64 million amid a shortfall in the upcoming budget year that's approaching a half-billion dollars.

The state buyouts plan will cost roughly $50 million but eliminate about $64 million in recurring spending.

The state will offer packages worth between $23,000 and $47,000, depending on a worker's length of employment, with cash incentives, 18 months of health insurance benefits and two years of tuition to a state community college or university.

Administration officials have said workers near retirement and those with less than 10 years of service are the ones most likely to take the buyout. The goal is to reduce the state work force by 5 percent, but layoffs will begin in January if enough workers don't accept the package.

The budget is allocating $28 million toward changes to the lottery-funded scholarship program that make it easier for college students to keep the merit-based HOPE awards. It took two years of negotiations for lawmakers to finally reach agreement on the scholarships.

"Accomplishing these milestones during tough economic times shows that by managing carefully and focusing on key priorities, tight budget years don't need to stall Tennessee's progress," Bredesen said.

Other cuts include $114 million in increases in K-12 education funding, $80 million expansion of TennCare's medically needy program, $56 million in higher education operating money and $22 million for new pre-kindergarten classrooms.

The budget is setting aside $100 million to help Tennessee land unspecified economic development projects. It doesn't raise taxes and but dips into state reserves to provide a $400 one-time payment to state workers instead of a raise.

"There's no smoke and mirrors in this budget, and I think this budget is a responsible one. It reflects a lot of tough choices," House Finance Chairman Craig Fitzhugh, D-Ripley, said.

Lawmakers ended up working without pay Wednesday because they exceeded the 90-day limit for a two-year legislative session. They earn a salary of just over $18,000 and can collect a $161 per diem during the 90 days to cover food and lodging.

Compromise Reached On Lottery Scholarships

House and Senate leaders reached a compromise Wednesday on sweeping legislation that included loosening requirements for students to maintain lottery-funded scholarships.

The House version passed last week, but both chambers had to work out differences in the legislation over what grade-point average students would have to maintain to keep their merit-based HOPE scholarships.

Under current rules, students must be enrolled full time in college and also have a grade-point average of at least 2.75 after their freshman year and a cumulative 3.0 GPA in subsequent years to keep the scholarship.

The compromise would set the required GPA at 2.75 through the end of the junior year. Students then would have to earn at least a 3.0 GPA for each semester after that to keep the scholarship.

Rep. Ulysses Jones Jr. said it's important that the 2.75 extend at least to the end of the student's junior year.

"It helps students maintain their scholarships," said the Memphis Democrat. "We're happy with the compromise."

Wednesday's meeting contrasted with one the day before in which a compromise fell apart because House Democrats were concerned about certain provisions of the bill, of which some were removed.

One measure would have allowed children of missionary workers to qualify for a lottery scholarship, and the other would offer scholarships to students who participate in programs to promote civics education.

"It's compromise," said Sen. Rosalind Kurita, a Clarksville Democrat and sponsor of the civics proposal. "We'll find another way."

According to Senate Education Chairwoman Jamie Woodson, R-Knoxville, this will eliminate the mathematical hardship of bringing up the cumulative GPA in the last year. Students will also get the scholarship for a full five years, as opposed to maxing out at 120 credit hours. It also removes some restrictions for home schooled students.

The bill passed the Senate 32-1, with Sen. Beverly Marrero casting the lone vote against it.

The issue has been a roadblock in getting the state budget approved. Legislators hope to pass the budget on Wednesday.

"The importance of making sure that it balances financially is that we don't want to come back. We don’t want this to be a short-term victory where we come back next year and have to tell a student, 'Well, you worked hard, you did what the rules said you would do, but we’re going to reign back your scholarships," Woodson said on Tuesday before the compromise was reached.

Both the House and Senate bills sought to loosen GPA requirements involving the lottery scholarships, but the standards in the House bill were less strict than those in the Senate bill.

"Our priority is to get students in college, keep them in college and have them graduate," said House Education Chairman Les Winningham, a Huntsville Democrat and main sponsor of the House bill.

Most lawmakers agreed that some form of grade adjustment was needed.

Figures released earlier this year by the Tennessee Higher Education Commission showed 50 percent of students lost their HOPE scholarships after their first year in college and 68 percent by their fourth year.

However, lawmakers have had to find a more feasible approach because the economic downturn has lowered lottery revenue projections for next year.

The across-the-board grade reduction would cost $17.5 million, compared to roughly $7.2 million for the other version.

Woodson said the fiscal impact of the compromise proposal is uncertain.

Lawmakers are also working on a plan to give non-traditional students and veterans some money for college.

Rep. Takes Makes Last-Ditch Effort To Halt 'Bredesen Bunker'

Tennessee Rep. Brian Kelsey, a Republican from Germantown, took one last stab at trying to halt the so-called "Bredesen Bunker."

Kelsey filed an amendment to the state budget to take all unspent funds on Conservation Hall and put them in the general fund. That would effectively halt construction on the bunker.

Finance Commissioner Dave Goetz briefed House Democrats about the amendment in their caucus meeting on Wednesday. The amendment would put $2.8 million back in the general fund. However, it would cost about $3.6 million to halt the project, which combines money spent along with cancelled contracts.

Rep. Susan Lynn also filed an amendment to stop federal money that is funneled through the state from going to Planned Parenthood locations in Davidson and Shelby counties.

Lottery Surplus Money Also Hotly Debated

Discussions over how to use lottery surplus money also became heated on the Senate floor on Tuesday.

The measure would use $100 million of the state's nearly $460 million in lottery reserves to make the state's K-12 schools more energy-efficient. It also would establish a council to award grants or loans for improvements such as better lighting or insulation.

State senators had taken up the energy-efficient schools plan to concur or nonconcur.

Channel 4’s Cara Kumari reported that the two sides were at odds over who was more pro-student and how best to use the money.

Opponents of the bill expressed concern that funds won't be evenly distributed, which could hurt schools in rural areas. But by a 17-15 vote, the Senate voted to concur on the Energy-Efficient Schools Program.

The bill is now headed to Gov. Phil Bredesen's desk for his consideration.

State Budget Awaits Vote

The state's budget also awaits final approval and passage from the Legislature.

Lawmakers seemed ready to accept a budget outlined by Gov. Phil Bredesen that would offer buyouts to state workers to cut about 2,000 jobs, reduce higher education spending by $56 million, give up on adding more pre-kindergarten classrooms and scrimp on increasing money for K-12 education.

Bredesen originally proposed a state budget of $27.8 billion, which was $170 million lower than the current year. But sharply declining revenues led the governor to offer a new version earlier this month that trimmed spending from his original budget by $468 million.

The budget is setting aside $100 million to help Tennessee land unspecified economic development projects. It doesn't raise taxes and but dips into state reserves to provide a $400 one-time payment to state workers instead of a raise.

The new budget year begins July 1.