Joined by public university officials, Gov. Arnold Schwarzenegger unveiled a deal Tuesday that he said would hurt higher education budgets next year but help them after that.

"Everyone knows that our budget crisis demands tough choices, but I've said from day one that we need to do everything we can to protect education," Schwarzenegger said at a Capitol news conference.

With the governor were University of California President Robert Dynes and California State University Chancellor Charles Reed, both of whom hailed the agreement.

"After several years of deep budget cuts with no end in sight, this compact brings the promise of renewed fiscal stability," Dynes said.

The agreement, which calls for accepting cuts in the next fiscal year in return for funding pledges through 2011, still needs the approval of Democratic lawmakers, who control the Senate and Assembly. Some of them attacked the GOP governor's plan, saying it would limit enrollment and cost students too much.

"I think that it's a bad deal for the students in California," said Assemblywoman Wilma Chan, D-Oakland.

Under the compact, most of the higher education cost-cutting provisions remain in Schwarzenegger's proposed 2004-05 state budget. Those include higher student fees and less financial aid.

The deal also continues the austere measures that shut out about 11,000 eligible freshmen from the UC and CSU systems this year. Instead, students were offered the option of guaranteed admission to a university after attending a two-year community college.

"I'm disappointed that today's announcement ... means thousands of students planning to attend a UC or CSU campus this year will have to put those plans on hold," Democratic state Controller Steve Westly said in a written statement.

Supporters of the compact said future funding increases specifically for enrollment growth should enable the systems to accept all eligible students. They also said the agreement would assure higher education budget increases later and bring stability to higher education finances.

"Stability is the real key," said Assemblyman Guy Houston, R-Livermore. "In a perfect world we'd have money for everybody. But facing facts and reality, we have to be able to balance the budget, and this is a way to do it."

After the 2004-05 fiscal year that begins in July, the compact calls for boosting higher education funding by 3 percent annually for the following two years. Funding would increase by 4 percent annually from the 2007-08 fiscal year through the 2010-11 fiscal year.

Critics said those increases would not make up for the big cuts higher education has suffered in recent years. They also said there is no assurance the compact will be honored in the future.

"These compacts are not guarantees," said John Travis, president of the California Faculty Association, which represents CSU teachers. "What they are is a kind of ephemeral promise."

The compact would increase undergraduate fees by 14 percent in the 2004-05 fiscal year, and 8 percent in each of the next two years. After that, increases would be limited to no more than 10 percent in any year.

Graduate fees would increase by 20 percent next year, instead of the 40 percent initially proposed. Fees would increase by 10 percent in the following two years.

"Students will know what they can count on, as far as fees go," Reed said.

Yet Assemblywoman Jackie Goldberg, D-Los Angeles, said that is of limited use. "If your family's income doesn't go up every year, what the heck good is planning going to do you?"

The compact is the latest deal Schwarzenegger has struck as he seeks consensus on the state's 2004-05 budget. On Tuesday he said he would consider Democratic critiques of the compact.