SACRAMENTO -- As part of controversial moves to sell his coming budget revision,

Gov. Arnold Schwarzenegger unveiled a wide-ranging deal Tuesday with university officials that would hike undergraduate fees beyond an already proposed 10 percent but halve a 40 percent boost for graduate students.

The proposal, together with another quietly forged pact with cities and counties the governor is set to unveil today, would mean multibillion-dollar cuts for universities and local governments this deficit-plagued year, in exchange for vows to bolster the budgets for both sectors in coming years.

Highlights of the higher education deal include undergraduate tuition hikes over each of the next three years, averaging 10 percent annually, and other fee increases to blunt the impact of nearly $700 million in cuts at the University of California and California State University systems.

In exchange, additional funds over the next couple of years would allow the UC and CSU to fund enrollment increases and end a program of diverting students to community colleges.

At a Capitol news conference, Schwarzenegger said he is doing "everything we can to protect education," UC President Robert Dynes said the pact "brings the promise of renewed fiscal stability," and CSU Chancellor Charles Reed said it represents "an exceptionally strong commitment to higher education."

But many of the majority Democrats in the Legislature that will pass judgment on Schwarzenegger's proposed 2004-05 budget -- especially those in the Bay Area's liberal delegation -- attacked the governor's strategy of trying to win an on-time budget, with no tax hikes, through what they called questionable, piecemeal deals with powerful special interests.

Sen. Don Perata, D-Oakland, likened the borrow-and-cut budget to "pushing forward into the future the expenditures that are due now."

Similar agreements between previous governors, including former Democratic Gov. Gray Davis and former Republican Gov. Pete Wilson, were later broken because the state ran into unexpected fiscal woes.

"We're here to express our disappointment," Assemblywoman Wilma Chan, D-Oakland, said at an immediate Capitol gathering of Democrats involved with higher education issues.

"For the first time in nearly 50 years, Governor Schwarzenegger is going to break California's promise to its children and their parents that we'll provide an appropriate college education for every qualified student that is accepted," Chan said.

Leadership was somewhat more restrained, with Senate leader John Burton, D-San Francisco, issuing a statement that "side deals made between the governor and various parties are agreements between them and are in no way binding in the Legislature."

Democratic Treasurer Phil Angelides, who sidestepped questions about whether his own news conference was tied to his likely 2006 gubernatorial bid, issued a general warning that Schwarzenegger's ineffectiveness will stall the budget -- assertions dismissed by the administration.

California is right back where we started from because the governor's original spending plan already relied heavily on borrowing, deferrals and one-time measures to reach nominal balance, Angelides said.

Angelides and other Democrats said they want tax increases considered along with spending cuts, but it is not clear yet how hard they will push. Schwarzenegger has said he'd at least look at a legislative budget containing tax increases.

Minority Republicans in the Legislature, who are opposed to tax hikes and who must supply at least a handful of votes to reach the required two-thirds margin for budget passage, said that because of a combination of borrowed money, spending cuts and a slowly improving economy, there will be more money and less of a budget fight in the Capitol this year.

As Schwarzenegger leads up to announcing his revised budget proposal Thursday, he's expected to announce today that he's forged a deal with cities and counties in which they would accept $1.3 billion in cuts this year and again next year in exchange for the governor supporting a constitutional amendment that would protect local government funding in the future.

He's also forged agreements with K-12 school representatives that clear the way for a $2 billion cut and is working on a deal to garner a greater share of Indian casino revenue.

The buildup to the budget revision comes against a backdrop of daily protests from advocacy groups fearing deep cuts to public health and welfare spending, which is expected to provide much of the fuel for battles over the budget.