SALT LAKE CITY — The Senate and the House finally reached an agreement Thursday night on how to handle the public education budget but only after Gov. Gary Herbert intervened.

The public education budget bill, SB2, no longer includes the controversial charter school funding component approved by the Senate but opposed by the House and the governor.

The Senate gave in after Herbert got involved late Thursday afternoon and spent more than an hour in Senate President Michael Waddoups' office with members of the Senate and House working out a deal.

"In this case, it clearly required the governor's participation," said Herbert's chief of staff, Jason Perry.

During the meeting, the governor and representatives from the Senate and the House agreed to "hold off on making the policy decision on changing the funding formula for charter schools and phasing in this new method over 13 years," said House Budget Chairman Ron Bigelow, R-West Valley. "The issue was not so much that we don't think there's a problem (with charter funding); the issue was the timing."

The Senate put up little fight.

"At this point, we want out," said Senate Majority Leader Scott Jenkins, R-Plain City. "You get down to this point, that's why we're willing to make some deals. We're tired. We've been here for 45 honkin' days."

Before the Senate agreed to the change, SB2 would have done away with local replacement, requiring school districts to instead pay charter schools a per-student portion of their property taxes.

District schools get more than one-third of their money from local property tax revenue. Because charter schools cannot levy taxes, they are financed from a separate pot of money called the "local replacement fund."

Now, the charter school funding issue will be discussed in future meetings of the Governor's Educational Excellence Commission.

"I think we may be better off in the long run," the sponsor of SB2, Sen. Howard Stephenson, R-Draper, said. He and other charter school advocates were disappointed but optimistic about capturing the governor's interest.

"I think the Legislature has done a fine job of balancing the budget," said Brian Allen, State Charter School Board chairman and a member of the Governor's Education Excellence committee. "It's kind of like Christmas: you hope and hope for lots of things, but you're happy with whatever you get."

Lawmakers approved the $3.4 billion public education budget for the upcoming school year with potential cuts ranging from $10 million to $15 million. The weighted pupil unit, which is the state funding doled out for each student, is proposed to remain the same at $2,577. But with 11,000 new students expected to enter the system this fall, per-student spending will decline.

"It's clear to me the Legislature held public education as its highest priority," said state Superintendent Larry Shumway.

The charter school proposal in the bill came as a surprise. House members in Thursday morning's debate voiced displeasure at the last-minute action, pointing out the education budget went through the proper committees and formal process with time for thought and discussion, while the changes did not.

"It's not something we discussed," said Rep. Marie Poulsen, D-Cottonwood Heights, a member of the Public Education Appropriations Subcommittee.

Stephenson, told reporters earlier Thursday that Senate Republicans had decided unanimously "we should hold firm on solving this issue of funding `phantom students' in the districts who have left to attend charter schools. We feel that has to be addressed. We've talked about it for over four years now and every year the answer is, 'Let's wait another year.' "

But Stephenson had frustrated some key GOP senators earlier in the session by giving what they saw as a self-serving speech before voting against a boost in the cigarette tax. The GOP caucus had little trouble agreeing to go along with the governor during a quick closed-door meeting.

And some lawmakers were also upset that Stephenson inserted the controversial charter school issue in the public education budget bill, which wasn't drafted until the final days of the session.

In future sessions, that bill is expected to be handled by House and Senate budget leaders rather than by the heads of the education appropriation subcommittees.

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