CHARLOTTETOWN — The Conservative government in Prince Edward Island has tabled a pre-election budget that promises income tax cuts and increased spending on health and education.

With Premier Pat Binns expected to send voters to the polls as early as next month, his government has produced a spending package that provides a bit of something for everyone.

Provincial Treasurer Mitch Murphy says his budget will result in $34 million in tax savings for individuals and businesses over this year and next.

The variable portion of the tax on gasoline and diesel will be capped at 8.7 cents per litre, which will result in a 1.4 cent a litre cut in the pump price as of midnight tonight.

An increase in health care spending includes money for new doctors, a new youth addictions facility, and efforts to help seniors remain in their own homes.

The province is spending $247 million on education, which includes adding more teachers and measures to reduce undergraduate tuition fees at U.P.E.I. by 10 per cent.

Highlights of the 2007-08 Prince Edward Island budget tabled Tuesday:

• Expenditures at $1.28 billion; surplus of $2.1 million; net debt at $1.34 billion.
• Tax changes will amount to $34 million in savings over this year and next year for taxpayers and Island businesses.
• The variable portion of the tax on gasoline and diesel will be capped at 8.7 cents per litre.
• About $2.1 million will be spent to cut undergraduate tuition fees at the University of Prince Edward Island by 10 per cent.
• An additional $1.8 million will be spent to increase the number of doctors in the province.
• A new youth addiction facility and program will cost $1 million.
• Additional funding will be given to the RCMP for a street-level drug program and for the methadone treatment program.