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ANNAPOLIS — State agencies were assessing the damage a day after the state's Board of Public Works approved nearly $350 million in spending cuts to public health programs, higher education, the arts, welfare services, public schools and the environment.

"I'm under no illusion that making cuts of this magnitude won't affect people," said Secretary of Health and Mental Hygiene John M. Colmers. "They will."

Gov. Martin O'Malley proposed the package of cuts, as state officials wrestle with a $432 million shortfall in state revenues against the backdrop of a faltering national economy.

"About a third of our budget is probably health care-related," said O'Malley (D). "Another 41 percent is public education, roughly, and that's general fund budget. So that's what we're left to look at in terms of these cuts."

Cuts to the state's general fund totaled $297.6 million.

About $85 million came from the state's Department of Health and Mental Hygiene. The cuts accounted for 2.2 percent of the overall general fund reductions, the largest to any state agency.

The budget action takes $186 million from a projected fund balance for fiscal 2009, which began July 1. Another $101 million comes from prior year reversions and fund transfers, which must be approved by the General Assembly early next year.

Among the cuts were $2.3 million from the Maryland State Arts Council, $1.3 million in public assistance payments to adults, $2.75 million to improve school performance and $5 million from a fund for cleaning up the Chesapeake Bay.

On Thursday, state agencies were grappling with the reductions.

Cuts of $15.6 million to the University System of Maryland and $8.2 million from community colleges will have a major impact.

The approved cuts were a mixed bag for higher education.

Earlier this month, budget Secretary T. Eloise Foster proposed cutting $16.4 million from the state's community colleges.

USM lobbyist Patrick J. Hogan called reductions to four-year institutions "a $35.6 million cut" because it gives a $20 million fund balance back to the state, as Foster proposed, but goes $5.6 million beyond her $10 million recommendation in general funds cuts.

The university system's Board of Regents voted not to increase tuition in the face of the cuts.

"We're not going to do a midyear tuition increase," Hogan said. "I think that would be disruptive to students and parents paying the bills, especially given the economic situation."

The board eliminated 830 state employee positions. Most were vacancies, including 181 in the health department and 100 in the Department of Human Resources. But the budget also will force layoffs of 40 state employees.

The Maryland Department of Transportation eliminated 66 positions as part of a $24.3 million cut from its budget.

Two-thirds of the positions were vacant. Another 23 jobs, including graphic designers, administrative assistants and clerical workers, were eliminated, said DOT spokesman Jack Cahalan.

The jobs were not part of the transportation's core mission, he said. "They're not operating positions such as bus operators," Cahalan said.

"We tried to cull these cuts from areas where they would cause the least pain," O'Malley said. "That's not to say that there's not going to be pain. There is, and there will be when 80 percent of our budget is health care, public safety or public education."

The board also reduced the amount of cost-of-living increases to community health providers and employees of nursing homes and residential treatment centers and to physicians, saving $20.6 million in general funds and $39.3 million overall.

The 2 percent cost-of-living increase for community service providers is more than the 1.35 percent proposed at the beginning of budget negotiations, but less than the 2.7 percent approved by the General Assembly, O'Malley said.

The cuts will not affect the Medicaid expansion passed last year.

Staff writers C. Benjamin Ford and Marcus Moore contributed to this report.