NASHVILLE, Tenn. -- Most of a $30 million fund for land and soil conservation programs in Tennessee appears likely to fall victim to the state's budget crunch.

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Lawmakers confirmed Thursday that they plan to use about $12 million from the fund to help make up for a rejected plan to end a tax exemption for family-owned businesses.

Gov. Phil Bredesen has proposed using another $12 million from the pool to help bridge other budget gaps.

That real estate transfer tax money is currently spent on wetlands acquisition, local and state parks and soil conservation. The fund is drawn from a 37 cent tax on every $100 of real estate deals.

Bredesen's original budget plan this year had envisioned restoring the fund its full $30 million level after it had been raided for other purposes in previous years. But that was before the extent of the budget shortfall for the upcoming budget year became clear earlier this month.

The governor is now proposing deep cuts -- including reducing the state's work force by 2,000 employees -- to close a shortfall that's approaching a half-billion dollars in the budget year that begins July 1.

Senate Speaker Ron Ramsey, R-Blountville, said the real estate transfer tax is a good source to fill the budget gap because it represents annual funding as opposed to drawing down one-time savings. "We're dedicated to making sure recurring money goes to recurring items," he said.

The state raised $157 million from the real estate transfer tax last year, and spent $18 million on conservation programs, according to the state Finance Department. The rest went to other government spending.

Bredesen's budget cuts also include $10 million in one-time money that had been earmarked for his Heritage Conservation Trust Fund for acquiring state park land.

The House on Thursday officially rejected Bredesen's call to close what the governor had called a tax loophole on commercial rents collected by family-owned, non-corporate entities, known as FONCEs.

State Revenue Commissioner Reagan Farr has called the exemption unfair because the same benefits aren't extended to properties that aren't family owned.

But lawmakers from both parties objected to the late introduction of the proposal and worried about the impact on smaller family-owned businesses.

Finance Commissioner Says Rep.'s Idea 'Insane'

Rep. Mike Turner, D-Old Hickory, wants to use $100 million from the state's budget reserves to delay any layoffs for at least a year.

Turner said he's worried that not enough state workers will volunteer for the buyouts to achieve the payroll reductions.

Bredesen has warned that mandatory layoffs could follow if not enough workers take up the offer, but has resisted tapping the state's reserve fund because it's not clear how long the economic downturn will last.

Turner's proposal drew a sharp rebuke from Bredesen's top Cabinet official on Thursday.

"Whatever craziness Mike Turner is floating around to not do anything, that's absolutely insane," Finance Commissioner Dave Goetz told the AP. "And he knows that."

"You then have a much bigger hole to fix the next time around. You could conceivablly by doing that increase the size of the layoffs you would have to have," Goetz said.

"It's insurance that when we leave here the employees will be protected at least for a year. It would give them time to get their family business in order before they get laid off permanently," Turner said.

But Turner, who said he's earned the support of 57 of 99 House members, called the plan an insurance policy because lawmakers aren't expected to get full details about the buyout package until after the legislative session ends.

"If he thinks I'm crazy, that's his opinion, but I think I'm right," Turner said about Goetz's comments. "And I think he's callous to expect us to go out of here without knowing what the heck we're voting on."