DENVER -- Democratic legislators are offering an alternate package of budget cuts to avoid eliminating $300 million in funding to Colorado colleges and universities, according to plans obtained Wednesday by The Associated Press.

The proposal calls for raising $210 million in revenue, postponing a major water project, increasing tobacco taxes, and transferring $15 million from college investment funds. It also calls for cutting $94 million from the budget, including $27 million by reducing medical provider rates and requiring state employees to take 10 unpaid furlough days. Lawmakers are also floating an idea that would temporarily eliminate property tax exemptions for senior citizens and disabled veterans.

The elimination of the property tax exemption drew fire from some Republicans, who said it simply goes too far.

"The Democrat majority is balancing the state budget on the backs of senior citizens and disabled veterans and I think that's shameful," said Rep. David Balmer (R) Centennial.

Rep. Mark Ferrandino said in 2000, Republicans supported eliminating the senior property tax exemption for three years.

"There are very, very tough choices and we're just going to have to make them," said Rep. Joe Rice (D). "There are things that are going to be cut that I think are important, but we just have to prioritize."

There are several plans being considered at the Captiol and they will be debated Thursday by the house.

Republicans and Democrats met Tuesday night to work out the plan after the Joint Budget Committee rejected demands for more cuts and insisted on getting the money from the reserves of Pinnacol Assurance, the state-created workers compensation insurance company.

They said the revised plan will be submitted Thursday as an amendment when the House begins debate on the budget bill.

Republicans offered their own list of cuts Tuesday that included eliminating increases for academic and vocational instructors in corrections to save $3 million, cutting $1 million from the governor's international trade office, cutting need-based aid to graduate students by $6 million and cutting $4 million from the public defender's office. Those proposed savings totaled $115 million, including 243 state jobs that would be cut.

Senate Minority Leader Josh Penry, R-Fruita, said relying on money from Pinnacol was a bad idea.

He told 7NEWS that lawmakers realized at the 11th hour that taking the money from Pinnacol was a gimmick and the only solution was to make real cuts. He said. "its time to roll up our sleeves and provide some give and take."

On Wednesday, the House Appropriations Committee delayed action on a bill that would have ordered Pinnacol to turn over $500 million from its approximately $700 million surplus while a new plan is being worked out. That bill is now expected to die.

Rep. Jack Pommer, D-Boulder, said the Legislature may wait and study the issue this summer and help would come too late to help balance next year's budget.

"It looks as though it might not be the ideal bill to balance our budget," Pommer said.

Gov. Bill Ritter issued a statement this week saying a large cut to state colleges and universities can't be allowed because it would cause the state to forfeit the entire $760 million it is getting under the federal stimulus package to restore budget cuts. That's because a $300 million hit would drop higher education below 2005 spending levels in violation of the stimulus act.

Ritter must spend most of the $760 million in stimulus money under his control on higher education and kindergarten through 12th grade schools. He plans to spend $150 million on higher education in the next fiscal year, $50 million more than originally planned, but he won't be able to do that if the $300 million cut stands. Rep. David Balmer,R-Centennial called on lawmakers to go beyound furloughs and to lay off some state workers. He said the private sector has already had to make hard decisions and now it is time for the state to do the same.