A budget conference committee finally compromised on the state’s fiscal package Tuesday, agreeing to cut UW System funding $44 million but maintaining the state shared-revenue program.

Committee members included expansive renovations to the state’s campaign-finance rules but exhausted mostly one-time fixes to eradicate a $1.1 billion deficit.

The plan, approved by committee members from the Senate and Assembly, must still pass in both full branches of the legislature before Gov. Scott McCallum can sign it into law. But the agreement was a huge step for legislators who had debated over 300 points of disagreement since April 16.

The Senate caucused Wednesday to vote on the deal.

Democrats in the Senate initially proposed cutting university funding as little as $20 million, less than half the final compromise. Assembly Republicans wanted to slice $108 million out of the UW System budget.

Despite the concessions, Assembly minority leader Spencer Black, D-Madison, called the decision on university funding “a disappointment.”

Still, the university is satisfied with the budget compromise, according to administrators, who were targeting cuts somewhere between the Senate offer and the $58 million McCallum submitted in January.

But UW System spokesman Erik Christianson warned students and parents that a $44 million cut still meant an impact on campus services across the state. He said the university would have to be patient with larger class sizes and delays in processing services such as financial aid.

The legislators were able to tie financial aid to tuition, meaning students with aid grants will not have to worry about shortfalls as tuition costs rise another 8 percent next year. The Board of Regents had been lobbying for the financial aid anchor as part of the financial package.

“We appreciate the governor’s and legislators’ special consideration for the role the university plays in economic development,” said UW System president Katharine Lyall.

McCallum’s proposed budget included steps to eliminate revenue-sharing, which distributes money among state cities and communities, but the backlash was strongly unfavorable. Democrats in the committee refused to budge on the program that provides “critical community services,” according to Senate majority leader Chuck Chvala, D-Madison.

This plan does contain a measure to reduce shared revenues by $40 million starting in 2004, one of several moves designed to shore up the state’s “structural deficit” — the mechanism critics claim will ensure budget problems continue into future sessions.

Assembly speaker Scott Jensen, R-Waukesha, pointed at state hiring limits and incentives for local municipalities to reduce costs.

“It is my hope that these budget reforms will help us avoid future fiscal crises,” Jensen said.

But Black, Jensen’s rival in the Assembly, voted against the proposal in committee, complaining it did not do enough to fix the long-term budget shortfalls and that it puts off instituting the campaign reforms until after the fall’s elections.

Party bickering delayed agreement

“The job we were here to do was resolve the budget for this fiscal year,” said Mike Browne, Chvala’s press secretary. “The bottom line is you’re dealing with another house and another party and at some point you just have to get something done.”

Both parties criticized the other’s leaders for holding up the process.

“All of us on the Republican side would have liked to see greater reductions in government spending than the Democrats were willing to accept,” Jensen said.

Legislators were not the only ones impatient at the delays in the budget agreement. The committee’s agreement on the biennial budget came a day after the end of the fiscal year.

As the committee members were inside the capitol wrapping up the deal, a tiny group of demonstrators gathered on the steps to protest the state’s labor contract, which expired in June 2001.

Carl Aniel of Local 171, along with two children and two friends, carried picket signs (“Give my Dad a raise”) and a large novelty card (“Unhappy Anniversary”).

“State workers have continued to provide a high level of service despite the fact that the current Governor McCallum has done nothing to settle the long-expired labor agreement,” Aniel said.

McCallum?s office said it had expected a larger turnout until labor leaders disagreed about who was responsible for the delay.

“It isn’t the governor that?s holding the contracts up,” said a McCallum press representative. “It’s the budget.”

Now, the only thing between McCallum and the budget is legislative approval. At this point, neither house can amend the budget proposal — members can only vote up or down. If it fails to pass, the conference committee will take another crack.

For now, the committee has reversed McCallum’s shared-revenue plan and granted the university fewer cuts with the anchored financial aid, but the governor said he was pleased with the way his initiatives had influenced the proposal.

“Our work is far from finished, however,” McCallum said. “We must never settle for the status quo.”