BISMARCK, N.D. (AP) - Bolstered by an overflowing state treasury, Gov. John Hoeven presented the North Dakota Legislature with a two-year, $6.3 billion proposed budget Wednesday. It includes robust spending increases for colleges and state aid to local schools and a major building project for North Dakota's state prison.

Hoeven's blueprint features $116.7 million in property tax discounts, which would be deducted from the tax bills of residential, commercial and industrial property owners for each of the next two years.

Homeowners would get a 10 percent tax break while businesses, farmers and ranchers would see a 5 percent property tax reduction for each of the next two years.

"Our budget contains no tax increases, no fee increases, and no borrowing or bonding," Hoeven said in a speech Wednesday to a joint session of the Legislature. "In fact, our budget provides real tax relief to the very people who produced our surplus in the first place, the citizens of North Dakota."

The plan incorporates the work of a special commission, headed by Lt. Gov. Jack Dalrymple, that seeks to overhaul how North Dakota provides aid to local schools.

Hoeven had promised at least $60 million more in state education spending to accompany the commission's work. His proposed budget offers about $80 million, including money to provide all-day kindergarten to "at-risk" children.

The proposed budget provides North Dakota's university system with an $83 million general fund spending increase, including $16.1 million for building maintenance and other one-time expenditures, and $14.2 million for building projects.

The Board of Higher Education had asked for a $63 million increase, although some building projects were included in a separate request.

Hoeven said his proposal was generous enough to ensure that North Dakota college tuition increases will be no more than 5 percent during the next two years.

Under the governor's plan, the total budget would rise from $5.75 billion to $6.33 billion over two years. The sum includes state tax revenues, federal aid and special state funds that are reserved for specific purposes, such as gasoline taxes and hunting license fees.

General fund spending, which is financed mostly by state taxes on income, sales, energy, corporations, tobacco and gambling, would jump from $1.99 billion to $2.47 billion, under Hoeven's proposal.

Of that sum, about $188 million is for one-time initiatives, including a $42 million construction and remodeling project at North Dakota's state penitentiary. It includes the demolition of an ancient cell block and construction of new cell space, along with a medical clinic and laundry.

The budget is fueled by continued increases in oil tax collections as well as expected strong growth in individual income and sales tax revenues.

Although Hoeven's plan increases state spending dramatically, he said it also includes a reserve of almost $413 million.

A state rainy-day fund, which now holds $99.5 million, would be increased to $200 million, and a state oil tax trust fund would provide an additional cushion of $178.6 million.

"We utilize this revenue growth and our surplus in a balanced way to continue to move our state forward," Hoeven said.