Updated at 7:33 p.m. CDT May 3, 2005

DES MOINES — Just 24 hours earlier it was all name-calling and finger-pointing, but the reality of a deadlocked state Senate nudged lawmakers of both parties to compromise on a budget that increases spending next year by 7.5 percent.

The budget includes more money for the state Board of Regents — in total, a $22 million funding increase, up from $15 million — but it is still well short of the $40 million the body that oversees the state universities, including Iowa State, had requested from the Legislature.

Regent and university officials say the extra money is critical to maintain the quality of the schools, which have undergone years of cuts and tuition increases since the late 1990s.

Leaders of both parties said the budget package was the best possible in a chamber split 25-25. While details still must be worked out, leaders said the deal signals that the end of this year”s session is near.

Republicans and Democrats announced their deal clustered around a conference room table where they spent a full day in negotiations.

The agreement would put spending at $5.1 billion, about $25 million higher than the spending plan approved earlier by the House. It boosts spending by $365 million from this fiscal year.

The additional spending would go to state worker salaries, education and to pay for a tough new sex offender law that the Senate passed later Tuesday. That measure would double the prison term to 10 years for committing lascivious acts with a child, and tighten supervision of those who are released from prison on sex charges. In addition, a second sex abuse conviction would bring life without the possibility of parole and the state would expand a DNA database of all felons.

The leaders announced the budget agreement at a news conference with both sides conceding they could find fault with the deal.

‘Nobody wants to be here,’ said Senate Republican leader Stewart Iverson, of Dows. ‘We”ve got to deal with this and we”re dealing with it.’

The leaders said they would begin approving a string of measures that flesh out the budget quickly and still could end this year”s session by week”s end.

‘It funds the priorities and gives us the ability to move forward,’ said Iverson.

The deal was immediately rejected by House leaders, who labeled it ‘downright insulting.’

House Speaker Chris Rants, R-Sioux City, said he met with Republicans in the Senate earlier Tuesday.

‘We explained to them why that offer was unacceptable to us and should be unacceptable to them,’ said Rants. ‘They will extend the session by two weeks.’

Rants said the House, where Republicans hold a slim 51-49 majority, is the last defense against runaway spending being proposed in the Senate.

‘The last I checked, there”s no money tree growing outside the capital,’ said Rants.

Senate Democratic Leader Michael Gronstal, of Council Bluffs, said the proposed spending plan is acceptable to Gov. Tom Vilsack and is the best that could be crafted in the Senate, which is split 25-25 between Republicans and Democrats.

‘This is the common ground that we all talked about at the beginning the session,’ said Gronstal. ‘We all have some victories and we all have some disappointments.’

Vilsack spokesman Matt Paul described the package unveiled Tuesday as constructive, but said some details need to be polished.

‘The level of spending cannot be any less,’ said Paul. ‘There is still more work to be done.’

The House wrapped up its work last week and Senate leaders said they would push hard to approve the new spending package by the end of this week, though that”s a daunting task because of having to print, correct and reprint the bills, thick paper packets filled with complex language.

‘They can”t possibly, logistically, just moving the paper, they can”t possibly adjourn this week,’ said Rants. ‘Unless something dramatic happens, I don”t see the need to bring our people back this week.’

Crafting a new state budget has snarled the end of this year”s session for more than a week. Lawmakers” expense payments ran out Friday and House members went home after completing their work.

The measure also includes a GOP-crafted plan to raise the state”s cigarette tax by 36 cents per pack, plowing that money back into property tax relief. The current cigarette tax is 36 cents per pack.

‘House Republicans will not participate in any budget deal that includes a tax increase,’ Rants said.

‘I understand their concerns,’ said Iverson, who said the deadlocked Senate meant both sides had to compromise.