COLUMBIA, S.C. - Legislators returning to the Statehouse on Tuesday will have to find a way to fill a $350 million gap in the state budget without cutting deeper into public schools and health programs or risk facing voters' wrath next fall.

The budget - usually the source of election-year projects that make voters happy back home - is more of a problem in a year when revenue is tight and 170 legislative seats are for grabs.

"We're looking at about a $350 million shortfall," said Senate Finance Chairman Hugh Leatherman, R-Florence. "That's going to be a real tough issue to handle."

It's made worse by the past two years of budget cuts, raids on nearly every state trust account and a federal bailout last year that helped spare the state's Medicaid program.

Gov. Mark Sanford released his $5.1 billion executive budget Thursday. His spending plan would generate $344 million, mostly through reduced agency spending and consolidation and selling some of the state's property.

His proposal offers a way out of the woods for legislators who have fretted for months that they faced sharp agency cuts in the budget year that begins this July. Departments within state government have seen funding plunge by 20 percent or more since the last healthy budget year three years ago.

Those reductions have been particularly tough on small agencies. For instance, the State Library has lost a third of its state money and the Vocational Rehabilitation Department is down 27 percent.

The trend continues in Sanford's budget. For instance, he eliminates 14 percent from the Arts Commission's budget and axes the John de la Howe School for at-risk youths, sending students to other facilities.

Part of Sanford's restructuring push - converting most statewide elected offices into appointed positions - already has worked its way into the Senate Judiciary Committee. But much of the agenda, including elements of his restructuring committee's recommendations, haven't seen the light of day in the General Assembly. They, too, are described in Sanford's budget proposal.

"Restructuring will get some attention," said House Speaker David Wilkins, R-Greenville.

But the restructuring plans, frequently linked to saving money, have skeptics.

"I don't have any problem with restructuring government," said Senate Minority Leader John Land, D- Manning. "But I believe we're spinning our wheels in trying to reinvent the wheel. The bottom line is it is much ado about nothing."

Land is a 28-year Senate veteran and recalls restructuring efforts a decade ago that consolidated dozens of state agencies and eliminated most agency boards. "I've never seen the savings from the first restructuring," he said.

Despite the tight budget, tax cutting plans abound in this election-year Legislature. The proposals pushed so far all raise sales taxes or other taxes to cover breaks on taxes for autos, homes or income.

One plan being pushed by House Ways and Means Chairman Bobby Harrell, R-Charleston, calls for the sales tax to increase a penny to 6 cents on the dollar and eliminates auto taxes and house reassessments. Other plans from House and Senate members raise the sales tax by 2 cents on the dollar to pay for eliminating school operating budgets from tax bills.

Proponents of those plans say property tax relief won't hurt the state budget.

Sanford calls for raising the cigarette tax and applying sales tax to lottery tickets. That new money would reduce state income taxes from 7 percent to 5.9 percent.

For the past two years, some legislators have tried various proposals to raise the cigarette tax, the nation's fourth lowest, to cover rising Medicaid costs. All have failed or been ruled out of order.

"I don't believe that we'll get a cigarette tax increase this year," Leatherman said.

But other legislators would consider a cigarette tax increase if changes are made in Medicaid to increase efficiency.

Rep. Rick Quinn, R-Columbia, helped push a bill to the Senate last year that calls for tougher eligibility requirements and other changes in Medicaid programs, but that bill remains in a a Senate subcommittee as lawmakers enter the second year of their two-year session.

Leatherman has previously favored tax increases on cars to bridge budget gaps and on gasoline to fix roads, but he won't suggest either this year. "I don't believe there's a mood over there for any tax increases," he said.

"'Over there" includes across the Statehouse lobby, where the House has repeatedly refused to go along with tax increases.

"You don't increase taxes when you're coming out of a recession," Wilkins said. "You don't further the burden to the taxpayer when you have the highest unemployment you've had in South Carolina in 10 years."

So attention could turn to bills that don't have an immediate bottom-line cost for taxpayers.

For instance, House members are expected to quickly develop a bill that targets lawsuit reforms.

Rep. Doug Jennings, D-Bennettsville, said the House Judiciary Committee could send that measure to the floor in the first week of the session.

However, there is disagreement on how far those changes will go.

Leatherman expects agreement on targeting frivolous lawsuits, but some want limits on how much can be paid out in lawsuits. "Caps are going to be a tough issue. That's one that will get a lot of the debate," he said.

Bills of all stripes face one huge hurdle - a Senate calendar clogged with bills left over from last year.

The House calendar has nine bills on it; the Senate calendar's filled with 70 - many ready to provoke filibusters and stalling. That includes a House bill that changes the state's employment at will law to say employers can't be bound by what they write in employee manuals.

Wilkins is optimistic that legislators will plow through.

"I've found that in election years, when everyone's up for election, you have more of a willingness to cooperate and get things done," he said.