The University of Hawai'i community and its supporters beat back a legislative proposal to move $59 million this week from UH special funds to the state's general fund.

Senate Bill 2695, proposed House Draft 1, cited the state's "extraordinary fiscal circumstances" as reason to move $96 million in "excess balances" from a variety of UH, Transportation Department and Health Department special funds to help balance the 2009-10 fiscal year budget.

The House Finance Committee on Tuesday morning trimmed its proposed cut to $2 million from the UH housing assistance revolving fund and to $5 million from the other state departments.

It was the first legislative attempt to "sweep" money from the university's tuition special fund, which consists of tuition payments from students, UH spokesman Gregg Takayama said.

Last year the Legislature successfully swept $5 million from the UH's research and training fund, Takayama said. But there have been no attempts by the Legislature to take money from UH special funds on the scale proposed earlier this week in the past five years — if ever, he said.

UH students, faculty, administrators and former regents submitted 150 pages of written testimony criticizing the proposed taking of special UH funds. A hardy handful stayed until 2 a.m. Tuesday to present oral testimony.

UH-Manoa Chancellor Virginia Hinshaw publicly thanked supporters for their efforts in an e-mail Tuesday — but warned that the battle to protect UH from further cuts will continue until the end of the session.

UH special funds saved from the chopping block included: $20 million from tuition and fees; $15 million from cancer research; $11 million to provide collateral for bond issues; and $10 million for research and training.

For the current fiscal year, which ends June 30, UH was given $98 million less in state general fund money than it asked for, UH President M.R.C. Greenwood said in her nine-page testimony regarding SB 2695.

For the entire UH system — the flagship Manoa campus, plus UH-Hilo, UH-West O'ahu and seven community colleges — budget cuts already in place have resulted in 370 fewer faculty and 9 percent fewer classes, plus service reductions such as reduced library hours, fewer counselors, fewer student workers and fewer community outreach programs.

House Finance Committee chairman Marcus Oshiro said he understands that UH took a hit — but so has every other state department.

Oshiro said lawmakers' look at special funds was their attempt to find solutions to the state's projected $1.2 billion budget shortfall for the two years ending June 2011.

Oshiro noted that special funds make up about half of the state's $10 billion budget.

"At first glance, we'd like to believe we can adjust the budget shortfall by draining special revolving funds,"  Oshiro said. Testimony from the UH and other state officials made clear where there are restrictions on special funds, or cases where the funds are used to match private or federal funds, he said.

For the next fiscal year, Hinshaw is still calling on UH supporters to oppose a $10 million cut in general fund appropriations to the UH system in HB 2200. That's in addition to the House budget bill giving the university $100 million less than it asked for, she said.

But Oshiro sees the expected $358 million in state general funds going to UH as being fair in the context of the current economy, he said.

If the UH can afford a six-year contract agreement with the faculty union that includes pay cut restoration in years two and three and raises in years five and six, "I think they can absorb a $10 million cut," Oshiro said.

Among the testimony opposing cuts to UH's special funds were comments from Nelson Batalion of Kaua'i. He wrote that student services are serious concerns for students of modest means. As the first in his family to get a college education, "if it wasn't for the Kaua'i Community College Learning Center/Library, as well the computer centers located around campus, I wouldn't have made it," he said.

UH oceanography professor David Karl pointed out how research special funds helped establish the Hawai'i Ocean Time project in 1988 — a project that "has helped to put UH at Manoa on the map, at least in the field of ocean sciences."

Investing in research is part of what makes the UH thrive and grow, he said.