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COLUMBIA, S.C. (AP\WACH) -- Gov. Nikki Haley's first budget proposal calls for corporations and people to get a break on their income taxes, while public workers in South Carolina go a fourth year without a pay raise.

The Republican governor unveiled her recommendations Friday for the proposed 2012-13 state budget.  It is subject to approval by the General Assembly.

"We handled this very much like people in their homes and businesses handled it," said the governor.  "We took what we had, we said what are the priorities?, and we really went to what are the core functions of government?"

Nearly $140 million in tax relief would pay for the first of a four-year phase-out of corporate income taxes. It also would give most taxpayers an $84 reduction in their state income taxes.

Her proposed budget cuts a key funding stream for public schools by $76 million, reducing the so-called base student cost that primarily pays teacher salaries.

Her proposal includes $100 million to cover state employees' health care and pension increases. It also adds law enforcement officers and several family court judges.

The biggest increases are in mental health and public safety.  $17 million will go toward the Department of Mental Health.

"We have people that can live a normal life," adds Haley, "but if they don't get the services they need, they are either in our jails or in our emergency rooms."

SLED Chief Mark Keel says hopes to hire more crime lab analysts to help clear a back log of violent crime cases.