Colorado's governor is proposing a state budget that offers a mixed-bag of spending cuts and new programs for next year, including money to help the chronically homeless using marijuana tax revenue.

John Hickenlooper's proposal would provide $18 million – the lion’s share of it coming from pot tax revenue – to help those who are homeless or, who have behavioral health needs, find affordable housing. It's been a concern of his since his days as Denver's mayor.

“Taking what used to be an illegal activity, now that it’s legal and taxable, using it to address another social ill is an opportunity we felt important to take advantage of, and one that would make some sense to the public," said Hickenlooper’s budget director Henry Sobanet 

Elsewhere in the budget, line items reflect the need to cope with a $500 million deficit.

“I think what you can see is health care, education, transportation, the biggest areas of the budget are bearing the brunt of these balancing issues," Sobanet said.

Hickenlooper's proposal includes  $109 million in cuts to transportation over the next two years. For K-12 spending, there's a proposed per-pupil funding increase.

But the budget proposal puts the state in a deeper hole when it comes to overall school funding. And it reduces payments to hospitals, which would prevent the state from having to send refunds to taxpayers.