ST. PAUL — A cost-cutting bill that freezes government worker pay, alters state employee health insurance and deeply slices budgets for most agencies cleared the Minnesota Senate on Wednesday.

The bill joins several other budget measures moving through the Legislature this week. The House approved an education funding bill early Wednesday that increases per-pupil payments to public schools while also making major changes to how schools operate, including ending the current teacher tenure system and banning teacher strikes.

Later Wednesday, the Senate was to vote on a health care measure that scales back spending by $1.6 billion by cutting state programs and asking federal officials for leeway on other care demands. Symbolic, smaller-ticket programs such as Meals on Wheels also suffer.

It’s all part of an effort to plug a $5 billion deficit while setting the next two-year budget. Republicans insist they won’t raise state taxes, as Democratic Gov. Mark Dayton recommended.

The Senate’s state government finance bill — approved 36-29 — is notable for the size of its cuts: Minnesota would spend nearly 60 percent less than anticipated on those items than before. And it comes in about $500 million leaner than Dayton proposed last month.

The bill depends on several steps to cut the cost of doing government business and on the state’s ability to gain revenue by rooting out tax cheats. Democrats argued that Republicans were being too rosy in their savings projections, with one saying the GOP would be better off trying “to find the pot of gold at the end of the rainbow.”

Republican Sen. Mike Parry of Waseca chafed at comments the bill relies on phony savings and said Minnesota can’t get by without wholesale changes in government operations.

“What are we afraid of in looking?” Parry said. “Isn’t that what we owe our citizens? Aren’t we supposed to look at new ways of doing things?”

Among the changes the bill would bring:

— The executive branch would be forced to trim the employee ranks by 15 percent by 2015, either through early retirements, layoffs or broad restructuring.

— State workers wouldn’t see any pay raises for another two years after having largely flat salaries for the last two.

— State employee health programs would be audited to weed out ineligible dependents, and every worker would move to high-deductible insurance plans with costs partially offset by state contributions to health savings accounts. Preventative care would be fully covered by the state.

— Special boards that assist ethnic minorities would be consolidated, with the exception of an American Indian agency.

— Most state agencies would see 10 to 15 percent cuts to their operating budgets. Military and veterans affairs agencies are spared from those cuts.

Dayton’s agencies warned that they would reduce services and close offices, resulting in tax refund checks being issued slower.

Senate Democrats predicted agencies won’t be able to meet their budget targets without massive layoffs.

“It goes way too far. In fact it’s a job killer,” said Sen. Chuck Wiger of North St. Paul. “A job is a job if it’s in public (sectors) as well. They pay taxes. They contribute in the community. They pay mortgages. They buy groceries.”

The Republican-sponsored House education bill passed 68-59 at about 2:45 a.m. Wednesday, after nearly six hours of sometimes contentious debate in which Democrats assured Republicans that Dayton would veto the measure because it contains policy changes he doesn’t support.

The bill scraps teacher tenure for the state’s K-12 schools in favor of an evaluation-based approach that makes student test scores a major factor. It contains multiple curbs on teacher bargaining rights, including the strike ban. It also creates a system for grading schools that would award additional state funds to those that perform well.

The bill wades into another area of disagreement between Republicans and Democrats by granting vouchers to help low-income families at failing public schools pay for private educations. It also eliminates aid aimed at promoting racial integration in Twin Cities schools that have large minority populations, and freezes special education funds.

“There’s a lot of great reform in this bill, a lot of stuff we can be proud of,” said Rep. Pat Garofalo, R-Farmington, the bill’s sponsor. He said it “puts kids first — no excuses, no exceptions.”

House Democrats were uniform in their criticism, saying the bill’s cuts and policy changes would fall hardest on poorer districts. “There’s a lot of bad and ugly in it,” Rep. Mindy Greiling, DFL-Roseville, said of the bill.

In a letter to Garofalo, state Education Commissioner Brenda Cassellius said she and Dayton don’t support the legislation. She said they hope to find common ground with Republicans but that the bill passed early Wednesday is “inherently harmful to at-risk students.”

Cassellius said she and Dayton take issue with the special education freeze, the elimination of racial integration funding and the voucher provision. She wrote that they were troubled by the strike prohibition and the elimination of tenure, and said efforts to promote better teacher performance should be addressed in a separate bill.