SACRAMENTO -- Gov. Schwarzenegger on Tuesday announced a higher education spending deal that trades cuts and fee increases now for future financial support.

Release of the agreement with university officials came two days before the governor is to release his revised budget plan. Democrats said the "back-room" deal would be detrimental to students.

Under Schwarzenegger's compact with University of California President Robert Dynes and California State University Chancellor Charles Reed, funding for the two systems will increase by 3 percent the next two fiscal years and by 4 percent from 2007-08 through 2010-11.

The agreement pledges money for the new UC Merced until 2010-11, when the campus is expected to have 5,000 students. UC Merced supporters have struggled in recent years to get funding necessary for the campus to open as scheduled in the fall of 2005.

"That's a good signal for those advocating for the development of this campus," said Larry Salinas, director of government relations for UC Merced.

As a trade-off, university leaders will not fight Schwarzenegger's proposed funding cuts to their systems this year. In all, cuts to UC and CSU would save about $660 million in the effort to revive a state budget that is billions of dollars in the red.

The deal is the latest example of the governor's strategy to negotiate in advance with those expected to protest his proposals.

Schwarzenegger has made an agreement with kindergarten through 12th-grade school representatives, and he is nearing a deal with local governments over budget cuts.

Democrats accused the governor of breaking a campaign promise to snuff out back-room dealmaking. The higher education deal, they said, breaks a promise to students that if they get good grades and test scores, they can go to state-supported universities.

"This state made a deal with the people, and no back-room deal by three guys in suits is

going to undo that deal," said Los Angeles Assemblywoman Jackie Goldberg, chairwoman of the Assembly Education Committee.

Goldberg and other Democrats hold majorities in the Assembly and Senate, which must sign off on Schwarzenegger's deal.

"When it comes to higher education funding, the Legislature will be the backstop for protecting students," said Assemblywoman Sarah Reyes, D-Fresno.

Sen. Jeff Denham, R-Merced, said he believes the compact will be honored. "This governor is different from any governor in the past," he said. "It's great to have a governor who continues to work with all sides to create an agreement."

He said the latest agreement will protect the integrity of the UC and CSU systems, and community colleges.

Fee hikes part of plan

The deal with the universities would impose a 14 percent increase on student fees next year and 8 percent increases each of the next two years.

Now, UC's average annual fees are $5,437 for resident undergraduates and $6,546 for graduate students. In the state system, average fees are $2,046 for undergraduates and $2,782 for graduates. The higher fees would begin in the fall.

Schwarzenegger also agreed the state would provide money for UC and CSU enrollment increases of about 2.5 percent per year through the end of the decade. This translates to an increase of 5,000 students each year at UC and 8,000 students each year at CSU.

Schwarzenegger said the agreement protects higher education funding and allows university leaders, parents and students to plan for the future.

"This will give families the stability they need to plan for their kids' college years," the governor said. "This will save money and expand placement for kids waiting to get in."

Schwarzenegger said the UC and CSU systems will implement more efficiencies, including a plan to ensure more students graduate in four years.

Push to get students through

The four-year push "flies in face of both common sense and reason," said Steven Filling, an associate professor of accounting at California State Univer- sity, Stanislaus, and president of the campus chapter of the California Faculty Association.

"What's important is not a piece of paper," he said. "It's the education. For some, that means they start out as accounting majors and end up as education majors. It has to be an exploratory process. I don't think it's a process that works well with that sort of factory mentality."

The California Faculty Association's state president, John Travis, said the deal's promised funding is not enough to repair damage done by years of cuts.

"The chancellor doesn't speak for the whole CSU," Travis said.

The fear by some is that promises made in the partnership, such as 3 percent increases to the general fund in 2005-06 and 2007-08, never will materialize. Faculty leaders say they are jaded by partnerships with the past two governors.

"We learned it only applies if the political and fiscal will is there," Travis said. "They're not a guarantee."

Reached in his district Tuesday, Assemblyman Joe Simitian, D-San Jose, said cuts proposed for the coming year are "likely to do lasting damage" to the state's higher education institutions.

"Today's announcement represents a set of commitments for years to come but does little, if anything, to address the cuts coming this year," said Simitian, chairman of the Assembly Budget Subcommittee on Education Finance.

He said he understands why higher education leaders would agree to the proposal.

"They were given two choices: lousy or worse," he said. "They chose lousy."

Bee staff writer Melanie Turner, Bee Capitol Bureau reporter Jennifer M. Fitzenberger and The Associated Press contributed to this report.