HARRISBURG -- House Republicans yesterday unveiled their own budget proposal -- a $27.3 billion plan that keeps state spending at current levels and makes up for declining revenue by cutting discretionary spending, leasing state land to energy companies for oil extraction and providing amnesty to tax scofflaws who pay up.

The most encouraging aspect of the plan is that it adequately funds necessities without raising taxes, said state Rep. Mike Turzai, R-Bradford Woods.

The proposed budget restores hospital funding that would have been cut under a plan proposed by Gov. Ed Rendell, but reduces spending by 12 percent in most other areas, Republican Leader Sam Smith said during a news conference yesterday.

He couldn't say whether the cuts would result in the loss of state jobs. That would depend how departments prioritize spending, he said.

Democrats say the GOP budget would translate into hundreds of job losses and reductions in needed services.

Democratic Appropriations Chairman Dwight Evans, of Philadelphia, is finding plenty of reasons to dislike the plan, but does say it takes a "baby step" toward a compromise in the budget logjam, although the sides remain miles apart.

By law, the state is supposed to have a budget in place by July 1, but the national recession has resulted in a loss of more than $3.2 billion in revenue. Mr. Rendell wants to make up the shortfall through spending cuts and increases in the personal income tax plus new taxes on cigars, smokeless tobacco and extraction of natural gas from the Marcellus shale.

Republicans -- and some Democrats -- don't support tax increases, but Mr. Evans said Republicans "are finally recognizing there's a need for additional revenue. Before they never talked about using the rainy day fund, and now they're talking about that." Republicans would use $350 million out of the $750 million in the fund, a reserve account meant for fiscal emergencies.

The GOP plan, which could come to a vote in the next two weeks, includes an amnesty program expected to bring in up to $200 million in back taxes by waiving half of the interest and all of the penalties for those who pay up now. Those who don't would incur an additional 5 percent penalty.

Revenue Secretary Steve Stetler, a Democratic appointee, called the proposed tax amnesty program a gimmick that sends the wrong message to taxpayers.

An amnesty program in the mid-1990s generated $93 million, but it cost $10 million to administer and delinquent tax collections dropped by a total of $62 million over the next two years, he said.

Democratic Leader Todd Eachus said he supports the concept of trying to collect back taxes, but not as a means of balancing the budget.

"This proposal tries to allow tax cheats -- people who have cheated on their taxes and not paid them -- to close the budget gap. We've got to chase people who haven't paid their bills in order to balance the budget. I don't think that's smart," said Mr. Eachus, D-Luzerne.

The state Department of Conservation and Natural Resources, meanwhile, hammered away at another part of the GOP plan that calls for the state to lease 20 percent of state-owned forests to companies that extract natural gas.

The department's acting secretary, John Quigley, said Republicans overestimate the amount of available forest land that has deep natural gas reservoirs.

Democrats prefer to tax gas extraction, which they say would provide a steadier revenue stream and closer environmental regulation.

Democratic leaders say they plan to put to a vote a budget already approved by the Senate, also calling for $27.3 billion in spending. It's a proposal they've fought at every turn as irresponsible.

Revenues have fallen since the Senate budget passed, making it at least $1 billion out of balance. If the House were to pass the Senate budget, too, it would be up to the governor to reduce spending through line-item vetoes.

The Legislature then could add back spending through a supplementary appropriation.

Although they don't support the bill, Democratic leaders said they will bring it to a vote to make a point about how deep cuts would have to be to bring it into balance.

Republican Appropriations Committee Chairman Mario Civera and other GOP leaders have said it's irresponsible to pass a spending plan that revenues won't support.

"They gotta examine their conscience here," Mr. Civera said. "They're going to pull this so the governor could have access to [the Senate bill] and do what he wants with it. The danger is if they pull this they're going to jeopardize [federal] stimulus money" that is contingent upon the state maintaining spending in certain areas including social services.

Meanwhile, Democratic leaders still are pushing to increase the personal income tax by as much as half a percentage point, bringing it to 3.57 percent.

"It can help close the budget responsibly and can be phased out in three years," Mr. Eachus said. "I know [Republicans] want it to go away" but the proposal is still on the table.

Rank-and-file Democrats aren't fully in support of the tax increase, so some crossover votes would be needed from Republicans for it to pass.