Capping a week of furious budget dealmaking, Gov. Arnold Schwarz- enegger is expected today to unveil a compromise to grab $2.6 billion from local governments while promising never to do it again.

The announcement comes a day after Schwarzenegger reached an accord with state university officials to cut $660 million in education funding next year, in exchange for financial support in future years.

The Republican governor has scrambled to negotiate agreements with key interest groups while preparing to release a revised plan Thursday to close a $17 billion budget shortfall.

Each of the agreements, however, will be scrutinized over the next month by the Democrat-controlled Legislature, which faces an oft-ignored June 15 deadline to adopt a spending plan.

"Side deals made between the governor and various parties are agreements between them and are in no way binding on the Legislature," Sen. John Burton, D-San Francisco, said in a statement Wednesday.

City and county officials, who will travel to Sacramento today to ratify the pact, said the agreement would trade steep, immediate cuts for a degree of immunity from state raids on local tax revenues in the future.

Today's deal follows an uprising by local governments, which borrowed a page from Schwarzenegger's playbook and went directly to voters to fight his plan to grab tax revenues from cities and counties. Local government officials collected more than 1 million signatures to qualify an initiative for the November ballot that would protect local government funding.

"This deal with the governor is potentially a far better deal for the cities than the ballot measure we qualified," said Cloverdale City Councilman Bob Jehn.

Under the agreement, local government would forfeit $2.6 billion over two years in exchange for a constitutional amendment preventing the state from taking property tax revenues beginning in 2006. It also would permanently cut the so-called "car tax," reducing state vehicle license fees from 2 percent to 0.65 percent of the vehicle's value.

The deal must be ratified by voters in November. If passed, any future changes to the agreement would go back to voters for approval.

If the Legislature backs the plan, local officials will not actively campaign for their own initiative, which already has been certified for the November election and will remain on the ballot.

But lawmakers in Sacramento are sounding a note of caution. Assemblyman Joe Nation, D-San Rafael, said the deal with local governments "feels like an effort to paper over the problem and deal with it at a future date."

"There may be legislators who conclude they can't support it because of the problems it creates two or three years from now," he said.

Nation, who is scheduled to meet with 65 area officials in Sacramento today, said he has not decided whether to support the plan.

Despite enthusiasm for the new deal, North Coast governments are bracing for deep cuts. Santa Rosa is anticipating about $2 million in cuts next year, and that number could grow depending on the final budget, City Manager Jeff Kolin said.

"The part that is missing for us now are how these numbers are going to impact Santa Rosa compared to what we have built into our budget based on the January budget," he said.

While crediting the governor's willingness to negotiate, Sonoma County Supervisor Tim Smith said the million-plus signatures sent a message to Sacramento that local governments deserved a seat at the bargaining table.

"I would be foolish to think that it (the initiative) didn't have something to do with it, but I believe that he (Schwarzenegger) would have entered into negotiations with us anyway," Smith said. "If we would have gotten this far, I don't know."

Today's deal marks the fourth time Schwarzenegger has negotiated with key interest groups before the release of his revised budget plan Thursday. In addition to local governments and university officials, he has struck deals with the state's teachers union and trial judges. He also is pursuing a revenue-sharing deal with Indian tribes that reportedly is worth $1 billion.

The agreement with universities is expected to save the state about $660 million next year while restoring funding in future years.

"It's most welcome because it provides a floor of stability and predictability for the university and students for years to come," said Ruben Armiñana, president of Sonoma State University.

"It's not perfect. It doesn't restore the other $600 million CSU has lost in the past eight or nine years. But it stops the bleeding," Armiñana said.

The deal would increase student fees by 14 percent next year and and 8 percent each of the next two years.

Currently, the average annual fees paid by resident undergraduate students in the University of California system is $5,437 and for graduate students, $6,546. In the California State University system, average fees are $2,046 for undergraduates and $2,782 for graduates. The higher fees would begin in the fall.

The governor promised to begin restoring university funding beginning with a 3 percent increase in 2005-2006.

If lawmakers approve the deal as part of the budget, it will mean the lifting of the cap on enrollments in CSU schools next year, said CSU Chancellor Charles Reed.

Some Assembly Democrats called the agreement an "outrage."

"We reject it," said Assemblyman Marco Firebaugh, D-South Gate, adding UC and CSU need to "think through and analyze the implications of this policy."

FILLING THE GAP

Steps taken to make up for California's $17 billion budget shortfall:

The state will take $2.6 billion from local governments over the next two years, in exchange for a constitutional amendment preventing the state from taking property tax revenues beginning in 2006. It also would permanently reduce state vehicle license fees, also known as the "car tax," from 2 percent to 0.65 percent of the vehicle's value.

$660 million in university funding will be cut next year, in exchange for financial support in future years. The deal would increase student fees by 14 percent next year and 8 percent each of the next two years. The governor promised to begin restoring university funding beginning with a 3 percent increase in 2005-2006.

A revenue-sharing deal is being sought with Indian tribes that reportedly is worth $1 billion.