Sacramento -- It's a budget that every lawmaker claims to hate, but a few interest groups breathed easier Tuesday after the Assembly sent a final spending plan to Gov. Gray Davis.

While every part of the budget took hits, education and health care were spared most of the deep cuts that had been feared as the state worked to close a $38 billion budget deficit.

But local governments and environmental agencies were hit hard by reductions.

"There are serious cuts up and down the line in every conceivable program," said Senate President Pro Tem John Burton, D-San Francisco.

Burton held out to protect programs for the poor. Davis had proposed cutting many optional MediCal benefits, such as hearing aids and speech therapy.

Davis had also suggested cutting MediCal provider rates by 15 percent -- but that was drawn back to a 5 percent cut, saving the state $115 million.

California ranks 42nd in the nation in what it pays to doctors and hospitals, according to Lucy Streett, program director for the Medi-Cal Policy Institute at the California Healthcare Foundation.

"We'll get by," said Dr. Jerome Franz, an internist who treats low- and moderate-income patients at his practice in the Mission District. 'It's hard to see it going down when (operating costs) are going up. It'll be a small dent for us, but I won't stop seeing patients."

Education spending was spared the worst of the cuts. K-12 schools are protected by Proposition 98, which sets minimum spending levels, and politicians are loath to dip into one of the most popular programs in the state.

"We are very happy there were not any further cuts beyond what the governor proposed in May, but it is still hard to celebrate what will end up being the deepest cut we have taken in decades," said Kevin Gordon, executive director of the California Association of School Business Officials.

Schools were cut $2.3 billion and programs such as summer school, instructional materials, maintenance and transportation are likely to see cutbacks, Gordon said.

San Francisco Unified School District had already axed $30 million from its budget in anticipation of the state cuts. Each school was told it must cut between 10 and 20 percent of its site budget and make difficult cuts in areas such as libraries, arts programs and classroom aids.

With no funding for increased enrollment next year, UC may have to reduce its enrollment of new students by at least 5,000 students in 2004-05.

In anticipation of the cuts, UC regents raised fees 25 percent this month. Another 5 percent could be imposed in the next few days to help the university deal with the added budget cuts.

The California State University system raised fees 30 percent and will not be able to take new students in the spring or winter.

"This is very, very serious. The cuts are very severe," said CSU spokeswoman Clara Potes-Fellow. "About 20,000 students are not going to be able to find a place at CSU."

It won't be any easier for students to find a seat at a community college.

The community colleges needed funding for a minimum 4 percent enrollment growth and received only 1.5 percent, which will cut out about 30,000 to 40, 000 students.

Fees will go up from $11 a unit to $18 a unit this year.

"It is a budget where we are not going to be able to meet all the needs of access," said Thomas Nussbaum, chancellor of the 108 California community colleges. "We are going to turn away a lot of students."

The environment suffered some setbacks as lawmakers approved a 64 percent reduction in general fund money for the California Environmental Protection Agency and the elimination of all general fund money for the state's Resources Agency.

While most of the money for those two environmental agencies comes from other sources, such as special funds or the federal government, it still is a significant hit. The money covers the salaries of cabinet secretaries and top executives.

A spokeswoman for the Department of Finance said the agencies could try to divert money away from the departments they oversee to make up the loss, or cover it with money from other funding sources. Either option would require legislative approval.

Rico Mastrodonato, executive director of the California League of Conservation Voters, said the reductions would hurt the state's ability to enforce its environmental regulations.

Still, Mastrodonato said overall the environment could have fared worse. He praised the inclusion of increased fees on water waste discharge, timber harvesting and air pollution.

Local governments are in the most tenuous position as a result of the budget -- holding their breath to see if the state can keep its word. A complicated swap of property and sales tax the state will use to pay off a deficit bond leaves local communities dependent on the state's word that they will be reimbursed dollar-for-dollar.

"We hope it's not just another promise made and then broken during the next financial crisis -- which could be next year," said Dwight Stenbakken, legislative director for the League of California Cities.