If approved, the deal would allow the GOP-controlled Legislature to balance fiscal 2005 spending using some of the state's $2 billion Constitutional Budget Reserve.

It would also mean school maintenance and construction projects in several Democrat districts as a compromise to win over their budget-balancing votes.

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Lawmakers have used this reserve account to erase short-term budget deficits in 11 of the last 13 sessions.

A plan to correct the state's long-term money woes remained stalled in the Senate and a Murkowski official reiterated the GOP governor's threat of a special session if no action is taken this year to fix it.

"We're not backing off from that, we are just as serious as we ever were," said Murkowski spokesman John Manly.

After two days of shuttle diplomacy, Senate President Gene Therriault has brokered a deal that would increase education funding and make some concessions to Democrats.

Sen. Lyman Hoffman, a Democrat from Bethel who negotiated the deal for minority lawmakers, said the package includes help for rural school maintenance, teacher retirement shortfalls and $2 million for erosion control at Shishmaref.

"In my group, they are about there," Hoffman said before beginning a closed-door meeting with other Senate Democrats.

Lawmakers are scheduled to adjourn today and the end-of-session dealmaking will ensure that happens.

In the Senate, where Republicans hold a 12-8 majority, it takes 15 votes to tap into the $2 billion reserve fund.

Minority Democrats typically use the budget-balancing vote as leverage to win concessions in what is primarily a GOP spending plan.

Earlier in the session, House Majority Republicans struck a deal with Democrats to pump $84.7 million more into K-12 education along with $15.8 million more for the University of Alaska.

The deal also provided $10 million for construction projects that Democrat lawmakers had sought. In return, Democrats delivered their budget-balancing vote.

If the deal is approved in the Senate, House lawmakers would also have to sign off on the compromise that spends less money.

House Finance Co-chairman John Harris, D-Valdez, said it appears like a fair deal for both sides. The House would need at least two Democrats to sign off on the Senate compromise.

"I would venture to say our caucus will go along with the deal. It's a matter of whether the minority buys into it," Harris said.

The Senate deal includes $1.4 million for Dillingham schools and $1.2 million for construction projects in Southeast Alaska district of Rep. Albert Kookesh, D-Angoon.

"That might be the only thing we can get out of the Senate this year," Kookesh said.

Senate lawmakers have already rejected several proposals that would bring major revenues into the state and close budget deficits that the Murkowski administration says have averaged about $400 million yearly.