NASHVILLE - Gov. Bill Haslam on Monday presented lawmakers a $30.2 billion budget that calls for a fourth straight year of state spending cuts but also provides new funds for education and a 1.6 percent pay increase for thousands of state workers, higher education employees and teachers.

The overall budget - Haslam's first as governor - envisions a 5.6 percent reduction in the spending plan that takes effect July 1. Much of the decrease stems from the loss of federal stimulus funds.

But Haslam also wants to cut $133.76 million in state spending. The budget also cuts 1,180 state positions, including 575 currently filled ones that the administration largely hopes to reduce through attrition and not layoffs.

In his State of the State address to lawmakers in which he unveiled the budget, Haslam said the state must change how it does business.

"Ten years from now we will not - and cannot - be doing government the same way we did 20 years ago," told the joint convention of the General Assembly. "The time is right to go on a vigorous diet that consumes less and exerts more energy."

The budget includes includes a $34.6 million commitment the state made for infrastructure with regard to the $1.5 billion Wacker Chemical plant now under construction near Cleveland, Tenn. The plan calls for issuing $29.4 million in bonds and relying on cash for the remaining $5.2 million.