The state Senate Ways and Means Committee on Thursday released a new draft of the state budget, scaling back the growth in spending to reflect the dramatic decline in revenue that was projected earlier this month.

Suddenly left with a half-billion dollars less to spend through fiscal year 2015 because of the lower forecast by the Council on Revenues, the committee retuned the state House draft of the budget and cut further into Gov. Neil Abercrombie’s spending request.

"This significant reduction has rippled through the actions taken by the Senate in proposing a sound fiscal policy to move forward," said Sen. David Ige (D, Pearl Harbor-Pearl City-Aiea), chairman of the Senate Ways and Means Committee.

The Senate draft would provide $12.1 billion in state spending for fiscal year 2015, about $167.8 million less than Abercrombie had initially sought. The draft would adjust state spending this fiscal year to $11.7 billion, about $46 million on top of what the governor wanted to trim.

In the state construction portion of the budget, the Senate would spend $2 billion in fiscal year 2015, down from the $2.7 billion the governor had wanted as an economic stimulus.

Ige, who is challenging Abercrombie in the Democratic primary, cautioned that the differences with the governor’s requests are fluid because some spending was removed from the budget draft but has advanced in separate bills.

Ige said, for example, that $33.5 million to cover faculty pay raises at the University of Hawaii was not reflected in the budget draft. House and Senate priorities, such as new spending to combat invasive species and help seniors, were also left out but will likely get financed.

The new draft, which will likely soon be approved by the full Senate, narrows the issues as House and Senate negotiators prepare to meet in conference committee on a final budget draft.

Even after the state closed the last fiscal year with a record $844 million surplus, Ige and Rep. Sylvia Luke (D, Punchbowl-Pauoa-Nuuanu), chairwoman of the House Finance Committee, had been preaching spending restraint so the state could rebuild its cash reserves and keep healthy surpluses over several years.

But Ige and Luke will likely now have to decide how much to let the budget fall into deficit over the state’s six-year financial plan.

The Legislature is required to balance the budget only during the two-year budget cycle, while the governor must balance the books through the six-year financial plan. Both the Senate and House budget drafts would slide into the red over six years, which, if left unchanged, would mean the governor would have to restrict spending to prevent deficits.

"We don’t want to just deal with this fiscal year; we want to at least ensure that the future years are sound, even if that’s not the responsibility of the Legislature," Luke said.

Kalbert Young, the state’s budget director, said the Senate draft is in alignment with budget revisions the Abercrombie administration has been exploring since the lower revenue forecast.

The Senate draft is also in line with Abercrombie on some new spending, such as an additional $15 million for the student spending formula at public schools and $2 million to support Strive HI, a school performance system that replaces the federal No Child Left Behind law. The draft also includes the restoration of $2 million for student athletics, which has been a priority for Ige.

The draft contains $1.5 million for Housing First, a homeless assistance program. Senators would also provide $5.5 million to increase monthly payments for foster families, which would be the first raise in more than two decades.

The Senate would devote $5.7 million to early learning, which would include money for the governor’s interim plan for preschool for low-income children at 30 public schools. The draft also includes $3 million to expand Preschool Open Doors, a child care program.

Ige said the money is expected to provide preschool opportunities for 2,740 children, about two-thirds of the students who would have been eligible for junior kindergarten, which is ending. Lawmakers had eliminated junior kindergarten, which had questionable effectiveness, in the hopes of eventually creating a statewide preschool program.