SPRINGFIELD - Gov. Rod Blagojevich slashed millions of dollars in projects and programs from the state budget Thursday in an attempt to free up cash for his controversial health insurance expansion plan.

Cut from the $59 billion budget was an estimated $463 million in funding for numerous local projects, educational programs and grants to universities.

Left untouched by the governor's action were pay raises lawmakers gave themselves, the governor and a number of high-ranking bureaucrats. Blagojevich stands to see a $20,000 raise in a year that has seen him struggle to win support for his initiatives.

"A budget should reflect the priorities of the people who elected us to make their lives better. That's why I'm removing almost $500 million in special pet projects and other spending that we simply can't afford," Blagojevich said in a prepared statement.

Blagojevich spokeswoman Rebecca Raush defended the pay raises, saying they were a top priority for many lawmakers.

"By leaving it in the budget, we hope it will make it harder for lawmakers to do anything that takes healthcare away from people," Rausch said.

Blagojevich's cuts were aimed at giving him financial wiggle room to bankroll growth in taxpayer-funded health insurance programs for poor people. Lawmakers rejected his earlier proposals for a massive expansion of health insurance, leaving Blagojevich to find a way to press forward on his own.

Lawmakers could override his vetoes, but Senate President Emil Jones, D-Chicago, has already said the Senate would leave the governor's cuts intact.

House Speaker Michael Madigan, D-Chicago, has said Blagojevich's health insurance proposal may not pass constitutional muster.

The governor's action does give Comptroller Dan Hynes the ability to begin paying state bills again. The state had been without a budget since Aug. 1, leaving vendors and hospitals without access to state payments.

In a testament to the frosty relations he's had with Madigan, the Democratic governor cut an estimated $141 million in what he called pork-barrel spending inserted in to the budget by Democratic members of the House.

He didn't touch most of the projects inserted into the budget by House Republicans, nor did he eliminate funding for lawmakers who sit on a special panel that may be asked to rule on his health insurance proposals.

For example, while the governor left intact money to help pay for construction of a fire station in Bloomington, which is represented by Republican state Rep. Dan Brady, he cut. $50,000 to help build a new nursing home in Rock Island County, which is represented by Democratic lawmakers.

The governor also appeared to target Madigan's wife, Shirley, who chairs the Illinois Arts Council.

The council lost $3.3 million in grants to arts organizations, $1.4 million for public television and radio stations and $600,000 in grants for arts education programs. A $1 million grant from the council to an Illinois version of C-SPAN also was eliminated.

Madigan's daughter, Attorney General Lisa Madigan, also will be affected. The governor pared payroll in her office by $2 million.

A spokesman for Speaker Madigan said the governor's actions were under review.

Universities, which expect to get a 2 percent increase, saw the governor take small chunks from some of their budgets.

The University of Illinois cooperative extension program was cut by at least $1.6 million. The Southern Illinois University dental school will lose a $100,000 grant.

Illinois State University spokesman Jay Groves said the changes won't stop the university from providing "modest" raises for faculty and staff members.

Public schools weren't spared either. While the new state budget provides $600 million in new money for schools across Illinois, several grant programs were cut back.

A program that funnels $3 million generated by off-track betting parlors to local parks and zoos also was cut. The governor eliminated $1.2 million for pandemic flu preparation.

The governor also vetoed money for an 80-bed expansion at the LaSalle Veterans Home, which is in a district represented by Democratic state Rep. Frank Mautino of Spring Valley.

State Sen. Gary Forby, D-Benton, said Blagojevich should have cut pay raises for himself and lawmakers because they missed several budget deadlines that led to schools missing aid payments.

"If we don't do our jobs, we should be penalized for it," he said.

Blagojevich wants lawmakers to return to Springfield to take action on a larger statewide construction program, which could be paid for by a new gambling casino in Chicago.

"These changes improve the budget that lawmakers sent me. But there's more to be done," Blagojevich said.

The legislation is House Bill 3866.