The Republican governor said the new spending plan was testament to the state's ability to bounce back from uncertain economic times. Though austere, Bush said Florida's budget is in much better shape than many other states including California, New York and North Carolina, where lawmakers are scrambling with severe budget shortfalls.

"While we still have challenges going forward into the future, it's safe to say we are in a far better position today than we were six month ago and certainly in better condition than many states," Bush told a packed room of reporters, staff members and supporters.

Bush applauded lawmakers for going forward with plans to offer businesses a $262 million tax break by allowing them to more quickly depreciate equipment purchased after Sept. 11. Bush said the economic benefit far outweighed the cuts that had to be taken elsewhere to pay for the tax incentive, which mirrors a similar effort on the federal level.

The tax plan allows corporations to immediately write-off from state corporate income tax filings 30 percent in depreciation expenses for equipment purchased after Sept. 11. Corporations now depreciate equipment at an annual rate of 10 percent over 10 years.

The tax break, which remains in effect until Sept. 11, 2004, is expected to lower state revenues by $428 million over the next four years.

Environmental groups hailed Bush's decision to veto a $100 million raid on a popular environmental land-buying program. Lawmakers used much of the funds to pay for pet projects in their districts.

"It sends a message about the integrity of this program and about the fact that the people of Florida, right up to Florida's governor, care about the protection of the environment and see it as truly high priority," said Charles Lee of Audubon Society of Florida.

On the veto side, Bush axed about $110 million in projects brought forth by members. Included in the list of more than 200 projects was $2.9 million for a nursing home diversion program and $40,400 for a "Take your Dad to School" program. Over his first term, Bush has vetoed about $1 billion in member spending.

Meanwhile, Democrats countered that the budget was built on 'smoke and mirrors.' Democrats have been critical of the budget, saying the state should not be giving tax breaks to businesses when its classrooms are overcrowded and the economy is still jittery.

"This is an election year budget," said Ryan Banfill, spokesman for the Florida Democratic Party.