Gov. Sonny Perdue plans to exempt most school funding and health-care funding from budget cuts in the coming year.

Whether he will be able to continue to shield those two areas — which make up more than half of the state's $21 billion budget — will depend on how quickly the economy improves.

"What everybody has to worry about is that the bottom falls completely out of the economy," said Herb Garrett, who heads the Georgia School Superintendents Association. "If it does, ultimately they won't be able to shield [education] funding either."

Perdue's Office of Planning and Budget sent out instructions to state agencies this week telling them to propose 3.5 percent budget cuts for the upcoming fiscal year, which begins July 1, and 4 percent for the following year.

Besides exempting education, the governor won't press for cuts in Medicaid, the health-care program for the poor and disabled.

Also exempt will be PeachCare health insurance for children and mental health funding. Combined, more than half of what the state spends in a year would be off-limits.

For those expenses to stay exempt, the state's economy may have to pick up, at least a little bit.

For the fiscal year that ends June 30, tax collections are down slightly. If they remain flat this month, administration officials say the state will come up $525 million short. With $1.5 billion in reserves, the deficit will be covered.

Also, state agencies will be returning millions of dollars that were budgeted, but not spent, during the fiscal year.